San Francisco: While U.S. President Donald Trump's plan to impose tariffs on Taiwan-produced chips aims to revive manufacturing jobs in the United States, experts suggest that this approach could negatively impact American firms and consumers.

According to Focus Taiwan, Trump's announcement on January 27 emphasized his intention to levy tariffs on Taiwanese chips to encourage domestic production, highlighting that 98 percent of the chip business is currently based in Taiwan. Trump argued that the tariffs would incentivize Taiwanese manufacturers to establish production facilities in the U.S. without requiring subsidies.

Bonnie Glaser, managing director of the Indo-Pacific Program at the German Marshall Fund, indicated that Trump's primary goal is to eliminate the U.S. trade deficit with Taiwan. She suggested that Taiwan could mitigate the threat of tariffs by reducing its trade surplus and by Taiwanese Semiconductor Manufacturing Company (TSMC) committing to increased chip production in the U.S.

Jessica Millan Patterson, chairwoman of the California Republican Party, noted that tariffs are a strategy Trump might employ to maintain America's advantageous position on the global stage. She emphasized that Trump would explore various avenues, including tariffs, to secure the U.S.' economic interests.

The Trump administration has already started implementing higher tariffs, with a 10 percent tariff on Chinese imports effective from February 4. Furthermore, Trump announced plans for a 25 percent tariff on imported steel and aluminum, with additional "reciprocal tariffs" expected to be unveiled soon.

Randy Chang, vice president of business development at NEO Semiconductor, warned that imposing a 100 percent tariff on Taiwan-produced chips could be detrimental to the U.S. Without Taiwan's semiconductor foundries, the U.S. might struggle to maintain its share in chip design, impacting sectors like integrated circuit design and end product marketing.

Silicon Valley-based semiconductor expert Joe Chou highlighted the cultural and logistical challenges of enhancing chip manufacturing in the U.S. He noted that while Taiwan excels in foundry manufacturing, the U.S. has traditionally dominated the fabless semiconductor market, which remains highly profitable.

Both Chang and Chou agreed that tariffs on Taiwanese semiconductor products might ultimately burden American consumers, including companies like Nvidia and Apple, as increased costs would likely be transferred to them.