President Donald Trump declared trade war on foreign manufacturers, notably levying high tariffs against Chinese imports and most recently semiconductors. Starting April 5, a baseline tariff of 10% will be applied to all covered countries. New overall city levy will start on April 9. The total effective tariff on Chinese imports will jump to an astounding 54%. This increase more than doubles the existing tariffs on foreign imports with a new 34% tariff exclusively on Chinese goods.
Foreign-made semiconductors are given particular prominence in Trump’s plan, though these goods have been exempted from reciprocal tariffs so far. He’s said that he could raise tariffs on semiconductors to 25% or more at a later date. This action highlights the Administration’s continued efforts to use trade policy to force companies to bring their manufacturing operations back home.
Tariffs Impact on Global Trade
For one, the new tariff regime is designed to shield Canada and Mexico. On the other hand, countries such as Taiwan, Vietnam, India, Malaysia, and Cambodia will be slapped with heavy tariffs. Vietnam will be hit with a 46% tariff, while Cambodia an even harsher 49%. These provisions would incentivize foreign producers to re-evaluate where they manufacture their goods.
As a result, the proposed tariffs would have far-reaching consequences for influential tech firms. But Apple can’t swallow just any increase—it would need to raise iPhone prices by at least $500. They might raise prices by $300 up to nearly $700 each to cover the new tariff load. Nintendo’s next-generation Switch 2 could face an even larger increase. This is a remarkable reversal considering the company now builds nearly all of its devices in nearby Vietnam and Cambodia.
In a statement during a recent press conference, Trump stated, “We are looking at pharma right now. He floated the possibility of broadening tariff exclusions beyond electronics to cover pharmaceutical products.
As these tariffs near their start dates, fears increase about what they will do to consumers—not just the catastrophic potential—but what they will do to manufacturers. At the same time, the tech industry is above all other industries anxious about how these tariffs will impact pricing structures and profit margins.
Author’s Opinion
The proposed tariffs are likely to have a significant impact on the global supply chain, particularly in industries like technology. While the intention behind the tariffs may be to bring manufacturing back to the U.S., the repercussions could be severe, leading to higher prices for consumers and increased uncertainty for businesses. Tech companies, in particular, are already facing pressure to absorb the costs, and the broader economic effects are bound to ripple out across multiple sectors.
Featured image credit: Lloyd’s List
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