The Trump administration is considering a second wave of semiconductor tariffs that would reach beyond chips themselves to finished products that rely on them, including laptops, gaming consoles, and data center servers. According to eight unnamed sources familiar with the discussions, the proposed duties mark a significant expansion of current policy that could reshape costs across the US technology sector.
Commerce Secretary Howard Lutnick reportedly favors a system that would cap duty-free chip imports at a volume tied to each company’s committed US production, four of the sources said. Commerce officials have also signaled in private conversations that the exemptions attached to January’s 25% tariff may not survive. Those carve-outs currently cover data centers, research and development, startups, repairs, non-data-center consumer and industrial applications, and public sector uses. A phase-in period is under discussion, though the framework could still shift substantially in the weeks ahead.
How the January Tariff Framework Set the Stage
Proclamation 11002, signed on January 14, placed a 25% duty on a narrow set of advanced accelerators, with Nvidia’s H200 and AMD’s MI325X named in the accompanying White House fact sheet. The document explicitly labeled the measure Phase 1 and directed Commerce to report to the president by July 1 on the market for semiconductors used in US data centers.
A separate April 14 report from the USTR and Commerce addressed tariff negotiations with Taiwan, South Korea, and Japan. Under Taiwan’s January trade agreement, Taiwanese chips face zero tariffs within 2.5 times a company’s current US manufacturing capacity while new plants are being built, tightening to 1.5 times once those facilities are complete.
Industry Pushback and the Taiwan Capacity Problem
TSMC has committed EUR 228 billion to its Arizona site, described as the largest foreign direct investment in US history. Even so, the company projects only around 30% of its most advanced capacity will be located there at full build-out. Taiwan produces more than 90% of the world’s leading-edge chips, and industry representatives argued during the talks that a quota tied to current domestic capacity cannot cover the volumes hyperscalers are buying during a record AI spending cycle.
Jonathan McHale, digital policy chief at the Computer and Communications Industry Association, whose members include Amazon, Google, and Meta, compared the data center buildout to “building the transcontinental railroad.” He warned that added cost and unpredictability place that investment at risk.
Tech lobbyists have met with Lutnick and Bureau of Industry and Security undersecretary Jeffrey Kessler with growing frequency since the start of summer. However, three of the sources said recent discussions have moved against the industry. One person involved estimated the domestic manufacturing build-out would take more than five years, longer than any phase-in period the administration has granted in previous tariff rounds.
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Image: tomshardware.com
