Trump says he plans to put a 100% tariff on computer chips

WASHINGTON — President Donald Trump said Wednesday he will impose a 100% tariff on computer chips and semiconductors, likely raising the cost of electronics, autos, household appliances and other goods.

However, companies that make computer chips in the United States would be spared the import tax, the Republican president said in the Oval Office while meeting with Apple CEO Tim Cook.

During the COVID-19 pandemic, a shortage of computer chips increased the price of autos and contributed to an overall uptick in inflation. Demand for computer chips climbed worldwide, with sales increasing 19.6% in the year-ended in June, according to the World Semiconductor Trade Statistics organization.

Chip makers Nvidia and Intel did not immediately answer inquiries.

Trump's tariff threats mark a significant break from existing plans to revive computer chip production in the U.S. He is choosing an approach that favors the proverbial stick over carrots in order to incentivize more production. Essentially, the president bets that higher chip costs would force most companies to open factories domestically, despite the risk that tariffs could squeeze corporate profits and push up prices for mobile phones, TVs and refrigerators.

By contrast, the bipartisan CHIPS and Science Act signed into law in 2022 by then-President Joe Biden provided more than $50 billion to support new computer chip plants, fund research and train workers for the industry. The mix of funding support, tax credits and other financial incentives were meant to draw in private investment, a strategy Trump vocally opposed.

The announcement came after Trump signed an executive order to place an additional 25% tariff on India for its purchases of Russian oil, bringing the combined tariffs imposed by the U.S. on its ally to 50%. The tariffs would go in effect 21 days after the signing of the order, meaning both India and Russia might have time to negotiate with the U.S. on the import taxes.

Meanwhile, Brazil requested consultations at the World Trade Organization over tariffs Trump imposed against the South American nation that went in effect Wednesday. Trump directly tied the 50% tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is under house arrest over an attempted coup plot.

Trump hikes tariffs on India

Trump is pushing China and India to stop buying oil from Russia and helping fund the Kremlin’s war against Ukraine. China also buys oil from Russia, but it was not included in the order the Republican president signed.

As part of a negotiating period with Beijing, Trump placed 30% tariffs on goods from China, a smaller rate than the combined import taxes with which he threatened New Delhi.

During an event Wednesday in the Oval Office, Trump affirmed the 50% tariff number, not giving a specific answers as to whether additional tariffs on India would be dropped if there were a deal between Russia and Ukraine.

“We’ll determine that later," he said. "But right now they’re paying a 50% tariff.”

The Indian government called the additional tariffs "unfortunate."

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"We reiterate that these actions are unfair, unjustified and unreasonable," Foreign Ministry spokesman Randhir Jaiswal said in a statement Wednesday, adding that India would take all actions necessary to protect its interests.

Jaiswal said India already made its stand clear that the country's imports were based on market factors and were part of an overall objective of ensuring energy security for its 1.4 billion people.

Ajay Srivastava, a former Indian trade official, said the latest tariff places the country among the most heavily taxed U.S. trading partners and far above rivals such as China, Vietnam and Bangladesh.

"The tariffs are expected to make Indian goods far costlier," he said, with the potential to cut exports to the U.S. by about 40% to 50%.

Srivastava said Trump's decision was "hypocritical" because China bought more Russian oil than India did last year.

"Washington avoids targeting Beijing because of China's leverage over critical minerals which are vital for U.S. defense and technology," he said.

The U.S. and China are in negotiations on trade, with Washington imposing a 30% tariff on Chinese goods and facing a 10% retaliatory tax from Beijing on American products.

In 2024, the U.S. ran a $45.8 billion trade deficit in goods with India, meaning America imported more from India than it exported, according to the U.S. Census Bureau. American consumers and businesses buy pharmaceutical drugs, precious stones and textiles and apparel from India, among other goods.

Brazil accuses US of violating commitments

"The United States has flagrantly violated key commitments the country has agreed upon at the WTO, such as the principle of the most favored nation and tariff ceilings negotiated at that organization,” Brazil's foreign ministry said.

The most favored nation principle is a cornerstone of Geneva-based WTO, whose aim is to get countries to respect trade agreements. The principle directs its members to treat one another equally in trade. WTO panels are set if no agreement is reached in disputes between members.

“Brazil’s government reiterates its availability for negotiation and hopes these consultations contribute to a solution to the matter,” the Brazilian foreign office said.

Earlier, a Brazilian government official who spoke on condition of anonymity said Brazil understands the case could drag on and there's no guarantee of success. 

Brazil's government estimates that 35.9% of the country's goods shipped to the American market are affected. That is about 4% of Brazil's total exports.

Photos: A look at global trade