Donald Trump says tariffs on semiconductors likely to be announced in a few days

US President Donald Trump announced on Sunday that he would reveal the tariff rate on imported semiconductors in the coming week, indicating flexibility for certain companies in the sector. This announcement suggests that exemptions for smartphones and computers from his reciprocal tariffs on China may be temporary as Trump aims to reshape trade in the semiconductor industry.

Speaking aboard Air Force One, Trump expressed a desire to simplify the process for companies to manufacture chips and semiconductors domestically. However, he did not confirm whether products like smartphones would remain exempt, stating the need for flexibility and avoidance of rigidity. 

Earlier, Trump initiated a national security trade investigation into the semiconductor sector, highlighting a focus on the entire electronics supply chain.

On Friday, the White House had announced exclusions from steep reciprocal tariffs, offering some hope that the tech industry might avoid becoming entangled in the trade conflict between the US and China. However, Commerce Secretary Howard Lutnick clarified that essential technology products from China, along with semiconductors, would face new duties within two months. These duties are separate from Trump's reciprocal tariffs, which recently rose to 125 per cent on Chinese imports.

Lutnick mentioned that new tariffs on smartphones, computers, and other electronics would be introduced in a month or two, predicting that these measures would encourage domestic production of such products. In response, Beijing raised its tariffs on US imports to 125 per cent and is assessing the impact of the recent exclusions for technology products.

Investor Bill Ackman urged Trump to pause the broad tariffs on China for three months, suggesting a temporary reduction to 10% to encourage US businesses to shift supply chains without significant disruption. Meanwhile, Senator Elizabeth Warren criticised the tariff strategy, labelling it chaotic and warning of potential economic harm.

Despite some exclusions announced by the US Customs and Border Protection, including categories like computers and semiconductor devices, the situation remains fluid. White House trade adviser Peter Navarro opened the door for negotiations with China but criticised its role in the fentanyl supply chain. Trade Representative Jamieson Greer indicated no current plans for direct talks between Trump and Chinese President Xi Jinping, though he expressed optimism for agreements with other countries.