U.S. officials are privately saying that they might not levy long-promised semiconductor tariffs soon, potentially delaying a centerpiece of President Donald Trump’s economic agenda.
Trump aides are taking their time on chip tariffs as they work to avoid a rupture with Beijing over trade issues, which would risk a return to a tit-for-tat trade war and disruption of the flow of critical rare earth minerals, according to two of the people.
Those people cautioned that no decision is final until the administration signs off on it, and also said that triple-digit tariffs could be imposed at any time. The sources spoke anonymously in order to recount private conversations about policy deliberations.
In August, Trump announced a 100% tariff on semiconductor imports, exempting firms producing or pledging to produce in the U.S. Officials had signaled the rollout was imminent, but the administration is now delaying as it debates timing and details.
Trump Faces Pressure On Consumer Prices
Any decision by the administration to slow down or narrow the scope of chip tariffs would come at a sensitive time for Trump. The Republican president is facing growing consumer angst over prices heading into the holiday shopping season.
Higher semiconductor import taxes could raise gadget costs, with plans to also tax foreign devices by chip count. While Trump recently cut tariffs on over 200 food products, he insists import taxes haven’t fueled inflation. A government shutdown has delayed consumer price data, though inflation has remained above the Fed’s target since Biden’s tenure.
Trump is also trying to maintain a delicate trade truce with China, a top manufacturer of both semiconductors and devices powered by them. Last month, Trump met Chinese President Xi Jinping in Busan, South Korea, and reached an agreement to set aside their trade issues, for now.
(With inputs from Reuters)
