Trump's new tariffs target tech, stir market turmoil
President Donald Trump announced the introduction of tariffs on semiconductors from abroad, primarily from Taiwan, to encourage companies to move production to the USA. Trump also stated that the success of the Chinese AI model, which caused significant drops in the stock market, can be seen as a positive development.
"In the very near future, we plan to impose tariffs on foreign production of computer chips, semiconductors, and pharmaceutical products to bring the production of these essential goods back to the United States of America," said Trump during a speech at a gathering of Republican congressmen at his golf resort in Doral near Miami.
Trump announces new tariffs
Donald Trump criticized the approach of his predecessor, who had offered companies subsidies to encourage them to build semiconductor factories in the USA. This approach was utilized by, among others, the world's largest semiconductor manufacturer, Taiwan's TSMC. TSMC is set to begin producing its first advanced chips in Arizona in the first half of this year, with a second factory planned for 2027 or 2028.
Trump stated that 98% of computer chips are produced in Taiwan and suggested that subsidies are not necessary for relocating production, advocating for tariffs as incentives instead. The introduction of tariffs may lead to an increase in electronics prices in the USA.
Trump also addressed the new Chinese AI model called DeepSeek, reportedly developed at a fraction of the cost of its American competitors while matching their quality. He noted that, in his view, this is "positive" because it demonstrates that spending exorbitant amounts on AI development is unnecessary.
Success of Chinese giant and problems in the USA
The success of DeepSeek contributed to significant declines in the stock prices of technology companies on Monday, including the manufacturer of advanced processors used in AI, NVIDIA Corporation. The company's shares dropped by 17% - nearly $600 billion - marking the largest single-day decline in market value in Wall Street history.
The launch of DeepSeek AI by the Chinese company should be a wake-up call for our industry, highlighting the need to focus on competition to succeed," emphasized Trump.
The president also discussed the future of TikTok, stating that there is a line of buyers interested in purchasing the Chinese application. In contrast to his prior statements on the subject, Trump suggested he would not permit the platform to remain under Chinese control. Previously, he had proposed that TikTok should become a joint venture with 50% US ownership.
