Trump Imposes 25% Tariff on Select AI Chips to Push Domestic Production

WASHINGTON — The Trump administration has imposed a 25% tariff on a narrowly defined category of advanced computing semiconductors, escalating its efforts to shift critical AI-era supply chains toward U.S. manufacturing.

The action was authorized under Section 232 of the Trade Expansion Act of 1962, with the White House framing the tariff as a national-security response to long-standing U.S. dependence on overseas chip production.

The proclamation is part of a broader semiconductor import policy covering semiconductors, semiconductor manufacturing equipment, and certain derivative products, with the administration signaling that additional measures could follow in later phases after trade negotiations. 

What the tariff targets — and what it avoids

The White House said the first phase applies immediately to a “very narrow category” of chips linked to advanced AI and technology policy goals.

At the same time, the policy includes key carve-outs designed to prevent disruption to the U.S. AI buildout. According to the presidential action, the 25% duty does not apply when the chips are imported to support the buildout of the United States technology supply chain, creating room for exemptions tied to domestic AI infrastructure deployment.

Why the administration is doing this

The White House has argued the U.S. still relies heavily on foreign production for critical chips, leaving the country exposed to geopolitical shocks and supply disruptions.

A senior administration official described the policy as an effort to ensure the U.S. does not remain dependent on offshore manufacturing for strategic technologies, especially as AI demand pushes chip supply chains into “national infrastructure” status.

Market impact

Semiconductor stocks were mixed following the announcement, as investors weighed the limited scope and exemption framework against the longer-term signal: Washington is increasingly willing to apply trade tools even to high-value, advanced technology supply chains.

Brief Summary

President Trump has imposed a 25% tariff on a narrow set of advanced computing semiconductors under Section 232 national-security authority. The administration says the move is aimed at accelerating domestic semiconductor manufacturing while allowing flexibility through exemptions for chips tied to U.S. supply-chain buildout.

FAQs

1) What is the new AI chip tariff?

A 25% ad valorem tariff on a narrowly defined category of advanced computing semiconductors, imposed under a Section 232 presidential proclamation.

2) What law is the administration using?

The proclamation invokes Section 232 of the Trade Expansion Act of 1962, which allows trade restrictions on national security grounds.

3) Are there exemptions?

Yes. The presidential action indicates the duty does not apply when chips are imported to support the buildout of the U.S. technology supply chain, leaving room for waivers/exemptions tied to domestic AI infrastructure and supply-chain needs.

4) Does this apply to all chips imported into the U.S.?

No. The first phase targets a very narrow category. The administration has separately indicated broader measures could be considered later.

5) What could happen next?

The proclamation references a possible second phase after trade negotiations, including broader tariffs and a proposed “tariff offset program” to provide preferential treatment for firms investing in U.S. semiconductor production.