How Trump’s Proposed Tariffs Could Impact Apple’s Chip Production Partnership with TSMC
The Trump administration’s proposed tariffs may soon target semiconductors and other key industries, potentially affecting Apple’s chip production partnership with TSMC. These tariffs, pushed as part of an ongoing effort to bring manufacturing back to the U.S., could create significant financial challenges for Apple.
During his re-election campaign, former President Donald Trump emphasized his agenda to return manufacturing to the U.S. through tariffs. While Apple has managed to avoid direct tariff impacts so far, this reprieve may not last much longer.
Trump’s Push for Tariffs on Semiconductors
Speaking at an Issues Conference at the Trump National Doral Resort in Miami, Florida, Trump addressed a variety of topics but focused heavily on tariffs. As detailed in a C-Span video, Trump discussed imposing tariffs on vehicles imported from Mexico, as well as on semiconductors, computer chips, and pharmaceuticals.
Trump specifically criticized the dependence on Taiwan, stating, “They left us and went to Taiwan, which is about 90% of the chip business. And we want them to come back.” This is a clear reference to TSMC, the Taiwanese semiconductor giant responsible for producing Apple’s chips.
Instead of offering financial incentives like the current administration’s Chips Act, Trump aims to use tariffs to drive production back to the U.S. He argued, “We don’t want to give them billions of dollars like this ridiculous program Biden has,” referring to the $6.6 billion awarded to TSMC in April for building a chip facility in Arizona. Instead, Trump suggested that companies like TSMC would build factories in the U.S. “on their own” to avoid taxes.
However, no specific details were provided on the potential tariff rates for chip imports. A report from the Consumer Technology Association suggested tariffs could range between 10% and 60%, with higher rates specifically targeting China. Such tariffs could result in price increases for consumers, including a 10.9% rise for accessories, 46% for notebooks and tablets, and 26% for smartphones.
The Impact on Apple
While Trump’s remarks didn’t directly mention Apple, the proposed tariffs could have a significant financial impact on the tech giant. During Trump’s first term, Apple CEO Tim Cook worked closely with the administration to avoid Chinese import tariffs, a strategy that helped Apple mitigate costs in the past. Cook has continued to foster a relationship with Trump, holding conversations that Trump himself has boasted about.
“I spoke with Tim Cook of Apple,” Trump said at a victory rally. “He said they’re going to make a massive investment in the United States because of our big election win.”
Despite these efforts, tariffs may still be on the horizon. Apple has taken steps to reduce its dependency on China by expanding production in other regions, such as India, where import tariffs are expected to be lower. Additionally, Apple has supported U.S.-based production, particularly in semiconductor manufacturing. TSMC’s Arizona facility, funded partially through the Chips Act, is already producing Apple’s chip designs on American soil.
What Lies Ahead for Apple and TSMC?
If these tariffs come into effect, Apple may face higher costs that could be passed down to consumers. While the company’s efforts to diversify its supply chain and expand U.S. production may offer some relief, the financial and operational challenges posed by the tariffs remain a pressing concern.
As the situation develops, Apple’s strategy to navigate these potential tariffs—whether through diplomacy, supply chain adjustments, or increased investment in the U.S.—will play a critical role in its future success.
