Taiwan to face lower tariffs and invest in US chip manufacturing in new trade deal as US introduces 25% global semiconductor tariff

As the Trump administration in the US continues to introduce and adjust trade measures part of its policy to prioritise domestic manufacturing and “put America first”, US president Donald Trump’s latest proclamations have declared both semiconductor and processed critical mineral imports as a “serious risk” to the US’ national security.

These actions came as the US secretary of commerce Harold Lutnick concluded investigations into the import of these goods into the US, recommending a new tariff for semiconductors and the pursuit of new agreements for critical mineral imports to “address the threatened impairment of the national security”.

On January 14, 2026, Trump issued a proclamation in response to a report from Lutnick in December 2025 which advised that “semiconductors, semiconductor manufacturing equipment and their derivative products are being imported into the United States in such quantities and under such circumstances as to threaten to impair the national security of the United States”.

The report noted that the US’ semiconductor manufacturing capacity is “too low” to meet projected national defence needs and match growing commercial requirements. It found that the US consumes approximately one quarter of the world’s semiconductors but currently only manufactures 10% of the chips it needs domestically.

Upon Lutnick’s recommendation, the White House has outlined a two-phased approach for addressing this issue. This begins with a 25% tariff on “a very narrow category of semiconductors” that relate to the US’ AI and technology policies as trade negotiations with foreign jurisdictions continue, then – once negotiations have concluded – broader tariffs on semiconductors will be introduced “at a rate of duty that is significant” alongside measures to offer preferential tariff treatment to companies investing in US semiconductor production.

This initial 25% tariff has already come into effect as of January 15, applying to “certain advanced computing chips” such as the NVIDIA H200 and AMD MI325X, which are large AI accelerator GPUs designed for high-performance computing and AI model training in data centres. The White House noted that the tariff will not apply to chips that are imported to support the buildout of the US technology supply chain and the strengthening of domestic manufacturing capacity for derivatives of semiconductors.

The implementation guidance published by US Customs & Border Protection makes clear that certain end uses are exempt from the additional 25% duty, including imports of semiconductors for use in automotive applications. So while the tariff does not yet apply to semiconductors for automotive manufacturing, these may be impacted If the US moves to the second phase of its approach which promises broader tariffs on semiconductors.

While some OEMs such as Ford and Tesla operate data centres in the US and may import advanced computing chips, the phase-one semiconductor tariff explicitly exempts chips used in US data centres, meaning these companies are also unlikely to be directly affected.

In a separate proclamation, Trump also announced that Lutnick’s investigation into critical minerals found that these import goods are also a threat to national security due to the US’ reliance on foreign countries for these minerals. Trump has claimed the US government will now seek to reach agreements with other nations to manage trade of critical minerals and, while no tariffs have initially been imposed, he has suggested that such actions may be deemed necessary if agreements are not reached in a timely manner.