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Investing.com-- The Donald Trump administration is considering imposing tariffs on electronic devices based on the number of chips in them, as it seeks to draw more manufacturing to the U.S., Reuters reported on Sunday.
The Commerce Department is considering a plan that would impose a tariff on an electronic device import equal to a percentage of the estimated value of the device’s chips, Reuters reported, citing three people familiar with the matter.
The plan is likely among the White House’s many considerations to improve domestic chip production. The Wall Street Journal had reported last week that the Trump administration was also considering mandating chipmakers to produce the same number of chips in the U.S. as their customers import from abroad.
Trump had earlier this year announced his intention to impose a 100% tariff on all semiconductor imports, although companies with U.S. manufacturing facilities would be exempt. But the duty has so far not come into effect.
The president last week imposed a similar measure on pharmaceutical imports, with the end-goal of encouraging companies to set up more manufacturing in the country.
Trump has also repeatedly raised concerns of national security over the U.S.’ reliance on foreign chips. The White House had earlier this year taken a 10% stake in beleaguered chipmaker Intel to help foster more American chipmaking.
But whether Trump can meaningfully drive up U.S. production remains doubtful, given the logistical and capital-intensive nature of chip manufacturing. Tariffs of popular electronics devices also stand to greatly push up their cost, while U.S.-made chips could prove to be much more expensive than their foreign counterparts.
Still, Trump’s tariff threats have drawn commitments from several major tech companies to manufacture more in the United States. TSMC (NYSE:TSM), the world’s biggest contract chipmaker, has committed a total $165 billion towards its U.S. facilities.
Wall Street tech giant Apple Inc (NASDAQ:AAPL) committed $500 billion in U.S. investment over the next four years, while Microsoft Corporation (NASDAQ:MSFT) expects to spend about $80 billion on infrastructure, with more than half of that dedicated to the United States.