Silicon Valley was initially relieved by President Trump's tariff exemptions for semiconductors, but many U.S. tech companies soon realized that these exemptions might actually complicate matters more. While some semiconductor imports are exempt, most entry into the U.S. involves products like GPUs and other devices that remain subject to tariffs. Analysts highlight that the narrow nature of the exemption could lead to significant financial burdens, as the effective tariff rate on certain tech products could reach around 40%. The semiconductor sector's reliance on imported materials further complicates the situation.
If you are a major chip producer who is making a sizable investment in the US, a hundred billion dollars will buy you a lot less in the next few years than the last few years.
The narrow exception for chips will do little to blunt wider negative impacts on the industry. The tariffs amount to 'something in the ballpark of a 40 percent blended tariff on that stuff.'
The semiconductor industry is deeply dependent on other imports and on the overall health of the US economy, because the components it makes are in so many kinds of consum.
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