Trump's 100% Chip Tariff To Exempt Everyone But China

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TrendForce stated that the United States' market share will grow from 12% to 17%, while South Korea's will increase slightly from 12% to 13% over the same period. Japan's market share is predicted to surge from 0% to 4%, while China's will fall from 8% to 6%, according to the projection.

Immediate impact

Trump's 100% tariff applies to all chip imports, but due to numerous exemptions, only Chinese chipmakers will be affected.

In an article published in April, before Trump's 100% tariff announcement, a Hunan-based columnist predicted that the impact of US tariffs on Chinese chipmakers will be minimal. In 2024, Chinese direct exports of integrated circuits to the US totaled US$2.2 billion, or 1.4% of China's total chip exports, according to official customs department data.

However, the writer failed to note that about $67.7 billion of Chinese integrated circuits were shipped to Hong Kong last year, accounting for 42.3% of China's total chip exports. It is believed that many of these chips were re-exported to other countries, though a more detailed breakdown by product is not available.

The Census and Statistics Department's research data showed that Hong Kong exported $6.8 billion of semiconductors and electronic valves and tubes to Vietnam, $6.5 billion of the same products to India and additional amounts to other Southeast Asian countries in 2023.

The Hong Kong Trade Development Council said the city's exports to the US amounted to $34.9 billion in 2023, 7% of which were semiconductors and electronic valves and tubes ($2.4 billion).

It's unclear whether the Trump administration will impose new tariffs on electronic products that use Chinese semiconductors. If not, Chinese chipmakers will still have to pay several billion dollars in tariffs to the US annually, unless they diversify to customers outside the US.

Chinese parts suppliers

On Thursday, TMTpost, a Beijing-based technology news outlet, published an article titled“Trump has gone crazy! The US will impose a 100% tariff on chip imports. The global supply chain is on high alert.”

“The new US tariff imposed on global chipmakers will significantly impact China's supply chain,” says Lin Zhijia, the article's author.“The uncertainty caused by US tariffs will discourage Apple from sourcing components from Chinese suppliers.”

Citing Bloomberg's data, Lin says that about 24% of Apple's suppliers are based in the US, followed by those in China (18.2%), Japan (13%), Taiwan (12.7%) and South Korea (8.3%).

While Apple will use fewer Chinese parts, it will continue to rely on its partner Foxconn to assemble most of its iPhones in China.