President Donald Trump says he's imposing a 100% tariff on computer chips— a move that raises the specter of higher prices for electronics, autos, household appliances and other essential goods that depend on the processors.
Looking into it, the US implementation goes down into the components, so yes. Except, I believe it’d be $50 chip @ 100%, other components at whatever tariff rates they may have, and then the 15% per-country/region tariff applies to all of it on top. So if the other components have no tariffs, it’d be $172.50. I’m now wondering how expensive everything would end up if you have tariffs on materials as well.
In any case though, it becomes ludicrously expensive no matter what because you’re at most dodging the 15%.
EDIT: You can also dodge some of the tariffs if some percentage of the product is made in the US. I wonder if you’d be able to dodge the chip tariff if the materials for it were partially sourced from the US. If possible, that’d probably be cheaper for companies than actually trying to manufacture chips here.
EDIT 2: Actually your calculation may be right, I’m having a hard time finding how they’re actually meant to be calculated. Admittedly it seems a bit weird to me that the rate would override the country-specific rate and thus be the same for chips from the EU and China, but I suppose none of this makes sense in the first place.
Yeah, I’m guessing if you just imported the wafers but did packaging in the US, you could probably get an exception. But I’m not well-versed in the law to know.
Surely the tariff would apply separately, so the imported cost would be $157.50 ($50 chip @ 100% tariff + $50 everything else @ 15% tariff).
If they didn’t apply separately, the tariff would be trivial to dodge.
Looking into it, the US implementation goes down into the components, so yes. Except, I believe it’d be $50 chip @ 100%, other components at whatever tariff rates they may have, and then the 15% per-country/region tariff applies to all of it on top. So if the other components have no tariffs, it’d be $172.50. I’m now wondering how expensive everything would end up if you have tariffs on materials as well.
In any case though, it becomes ludicrously expensive no matter what because you’re at most dodging the 15%.
EDIT: You can also dodge some of the tariffs if some percentage of the product is made in the US. I wonder if you’d be able to dodge the chip tariff if the materials for it were partially sourced from the US. If possible, that’d probably be cheaper for companies than actually trying to manufacture chips here.
EDIT 2: Actually your calculation may be right, I’m having a hard time finding how they’re actually meant to be calculated. Admittedly it seems a bit weird to me that the rate would override the country-specific rate and thus be the same for chips from the EU and China, but I suppose none of this makes sense in the first place.
Yeah, I’m guessing if you just imported the wafers but did packaging in the US, you could probably get an exception. But I’m not well-versed in the law to know.