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Trump administration weighs expanding chip tariffs to laptops, consoles, and servers, report claims — January's data center exemptions may be scrapped
The Trump administration is weighing a second round of semiconductor tariffs that would extend duties beyond chips to products built with them, including laptops, gaming consoles, and data center servers, eight unnamed sources familiar with the talks told POLITICOin a report published today. Commerce Secretary Howard Lutnick favors a structure that would cap duty-free chip imports at a volume pegged to each company's committed U.S. production, four of the sources said, and Commerce officials have indicated in private talks that the exemptions attached to January's 25% tariff, which cover data centers, R&D, startups, and consumer devices, may not carry over. A phase-in period is under discussion, and the framework could still change substantially in the coming weeks.
Go deeper with TH Premium: Taiwan, trade, and tariffs
Proclamation 11002, signed on January 14, imposed a 25% duty on a narrow set of advanced accelerators, with Nvidia's H200 and AMD's MI325X named in the accompanying White House fact sheet, and explicitly labeled the action Phase 1.
The same document directed Commerce to report to the president by July 1 on the market for semiconductors used in U.S. data centers, and a separate April 14 report from the USTR and Commerce covered tariff negotiations with Taiwan, South Korea, and Japan. The exemption categories now in question match those written into the January action and include U.S. data centers, research and development, startups, repairs, non-data-center consumer and industrial applications, and public sector uses.
Taiwan's January trade agreement applies zero tariffs on Taiwanese chips within 2.5 times a company's current U.S. manufacturing capacity while new plants are under construction, tightening to 1.5 times once they're built. TSMC has committed $265 billion to its Arizona site, the largest foreign direct investment in U.S. history, yet projects only around 30% of its most advanced capacity there at full build-out, according to POLITICO. Taiwan produces more than 90% of the world's leading-edge chips, and industry representatives argued in the talks that a quota keyed to current domestic capacity can't cover the volumes hyperscalers are buying during a record AI spending run.
Jonathan McHale, digital policy chief at the Computer and Communications Industry Association, whose members include Amazon, Google, and Meta, compared the data center buildout to "building the transcontinental railroad" and said added cost and unpredictability put that investment at risk.
Tech lobbyists have met with Lutnick and Bureau of Industry and Security undersecretary Jeffrey Kessler with growing frequency since the start of summer, per the report, but three of the sources said recent talks moved against the industry. One person involved put the domestic manufacturing build-out at more than five years, longer than any phase-in the administration has allowed on previous tariff rounds.
White House spokesperson Kush Desai defended the approach, saying reshoring chip manufacturing is a top priority for the president; the Commerce Department didn't respond to POLITICO's requests for comment.
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Luke James is a freelance writer and journalist. Although his background is in legal, he has a personal interest in all things tech, especially hardware and microelectronics, and anything regulatory.
I wonder if the PC market will even exist at all in a year or two? It seems like they are purposely trying to destroy it with great haste.
Purposefully destroying it? No, I don't think that is even a consideration (or afterthought). This is just an unintended consequence to changes in the overall speculative and evolving ecosystem,
Purposefully destroying it? No, I don't think that is even a consideration (or afterthought). This is just an unintended consequence to changes in the overall speculative and evolving ecosystem,
To me, it looks like they are trying to push people into a tech desert due to the prices increasing and a more tightly constrained consumer supply. That way they can get people into a different ecosystem, like game streaming with monthly subscriptions. The changes in the ecosystem are the intended consequences, otherwise there would be no change.
To me, it looks like they are trying to push people into a tech desert due to the prices increasing. That way they can get people into a different ecosystem, like game streaming. The changes in the ecosystem is the intended consequences, otherwise there would be no change.
Maybe, but I think it that is far outside of the decision/investment loop of these guys to think about the enthusiasts PC market and things like a game streaming service.
Some outside of these jokers may try something like that (and likely fail), but those pushing/speculating aren't thinking about immediate consumer impacts.
Maybe, but I think it that is far outside of the decision/investment loop of these guys to think about the enthusiasts PC market and things like a game streaming service.
Some outside of these jokers may try something like that (and likely fail), but those pushing/speculating aren't thinking about immediate consumer impacts.
I stand by my observations. I could be wrong, which is fine. I agree with you that they aren't thinking about the immediate impact to consumers, more of an afterthought really. That's really how I come to my original conclusion of them trying to destroy the consumer market.
I stand by my observations. I could be wrong, which is fine. I agree with you that they aren't thinking about the immediate impact to consumers, more of an afterthought really. That's really how I come to my original conclusion of them trying to destroy the consumer market.
This is just more performative nonsense to get headlines and make it seem like they're doing something. The usual suspects of extremely rich will appeal for carve outs and get them meanwhile consumer markets will be squeezed further. Investment in the US is almost entirely wrapped around ai at this point to such an extent that if you removed it and looked at all other investment the red flags of a recession would be apparent.
I genuinely wish what was being done was actually intended to reshore manufacturing and assembly. If the intent was actually to reshore they would include incentives for doing so. While the deal struck regarding TSMC chips wouldn't really work for most markets that's an example of having an incentive which can mitigate the penalty. Building out manufacturing and/or assembly takes time and unless the market a business is in is growing just passing on the tariff costs to customers is going to be a better choice than building in the US.
