New semiconductor tariffs under consideration by the Trump administration could arrive at a critical moment for American technology, and industry groups warn the move may undercut the country’s artificial intelligence ambitions. According to reporting on the administration’s plans, a broad set of chip duties could take effect within weeks or months.
Roughly eight people familiar with the discussions, who spoke on condition of anonymity, described a framework that is still being finalized. One option under review would sharply widen the range of products subject to the duties. Rather than taxing chips alone, the tariffs could extend to many goods built with semiconductors, including gaming consoles and the servers that power data centers.
That prospect represents a worst-case outcome for the tech sector. Since Trump took office, trade organizations have cautioned that applying tariffs to both semiconductors and the wide range of downstream products that rely on them, potentially including used or refurbished items containing chips, would damage the broader economy.
Estimated Economic Costs and Data Center Delays
The approach runs counter to the goals laid out in Trump’s AI Action Plan, according to industry analysts. In June, the Computer and Communications Industry Association (CCIA) estimated that such tariffs could cost the United States about EUR 77 billion annually in GDP losses. The group also projected that roughly 20 percent of data center projects planned through 2030 could face delays or cancellation.
The CCIA further warned that the duties could push more data center development outside the United States, an outcome at odds with the administration’s stated goal of drawing more manufacturing and infrastructure onshore.
In a May letter to Treasury Secretary Scott Bessent, cosigned by about 20 trade groups, the CCIA outlined additional ripple effects that could follow if certain products are not exempted. Consumers could see higher prices on everyday tools such as smartphones, laptops, tablets, smartwatches, connected devices, and vehicles at a time when many US households already face tight budgets.
Consumer Impact and Possible Tariff Relief
The letter argued that tariffs could also narrow technology choices for Americans by delaying new product launches, including devices built around the latest AI capabilities. Weaker demand for popular tech, the groups said, risks slowing innovation and AI adoption across the country.
“Consumer devices are the primary interface through which Americans access AI-powered tools. AI only delivers on its promise when people can actually use it—and tariffs that price consumers out of the device market would slow AI adoption at the very moment the United States is positioned to lead,” the letter stated.
To limit the fallout for AI companies, the administration is weighing some tariff relief. Sources indicated that any exemptions would likely be linked to foreign firms investing in US chip production, such as Taiwan Semiconductor Manufacturing Co. That structure reportedly aligns with the preference of Commerce Secretary Howard Lutnick.
The timing of any announcement may also reflect the data center development schedule and the approaching holiday shopping season. Trump has previously exempted certain goods from tariffs to avoid consumer backlash tied to his approval ratings.
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Image: arstechnica.com
