The Trump administration is preparing sweeping semiconductor tariffs that could hit chips and the downstream products built with them within weeks or months, a move the Computer and Communications Industry Association estimates would cost the US $90 billion annually in GDP losses and delay or cancel 20 percent of data center projects planned through 2030. Politico reported the framework on Thursday, citing about eight people familiar with the plans. One option under consideration would tax not only imported chips but gaming consoles, servers, and other goods containing them.
The scope is what has the industry alarmed. A May letter to Treasury Secretary Scott Bessent, cosigned by roughly 20 trade groups, warned that taxing smartphones, laptops, tablets, smartwatches, and connected vehicles would raise consumer prices and delay new AI-enabled product launches. The CCIA's June analysis pegged the GDP hit at $90 billion per year and warned tariffs could push data center development outside the US — the opposite of the administration's stated goal.
The timing collides with a chip shortage that Gartner expects to persist well into 2027. Global semiconductor revenue is forecast to reach $1.6 trillion in 2026, arriving sooner than prior estimates as scarcity drives prices up. Layering tariffs on top would hit Nvidia and Advanced Micro Devices hardest — both rely on overseas manufacturers, primarily Taiwan Semiconductor Manufacturing Co., to produce their chips. Apple faces a related squeeze against foreign rivals that would not pay the duties.
Key facts
- 01The CCIA estimates broad chip tariffs would cost the US $90B annually in GDP losses.
- 02About 20% of US data center projects planned through 2030 would be delayed or canceled.
- 03Gartner forecasts global semiconductor revenue will reach $1.6 trillion in 2026.
- 04The CCIA proposes lowering the presumed 25% tariff rate to 10% and exempting AI server chips.
- 05High-end chips are forecast to remain in short supply through 2027, well before domestic fabs come online.
Commerce Secretary Howard Lutnick is reportedly the main advocate for a broad application, arguing the US needs pressure to reshore its supply chain. Four sources told Politico that Lutnick's preferred structure would let a set volume of chips enter duty-free, with the allowance tied to how much each company pledges to produce on American soil. Different countries could face different rates, further complicating supply-chain planning.
Industry representatives say the duty-free carve-out under discussion is too small to matter. "The volume they're talking about granting duty-free wouldn't cover the hyperscalers alone, let alone the rest of the industry," one tech representative told Politico. "Those are chips we physically can't buy here, because the capacity doesn't exist yet." The same source added: "The math literally just does not work."
The underlying problem is a timeline mismatch. Domestic chip fabs take years to build, and no policy can compress that. Companies scaling AI infrastructure now have to import semiconductors regardless of tariff rates. The Next Web summarized it plainly: "Taxing the imports in the meantime raises the cost of the thing the administration also says it wants, which is American AI infrastructure at scale. There is no version of the timeline in which domestic supply arrives before the buildout needs the chips."
“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.”— Computer and Communications Industry Association, Trade group letter to Treasury Secretary Scott Bessent
The tech industry has been meeting with Trump officials with increasing frequency since the start of summer, according to Politico's sources, but the talks have recently trended in a negative direction. Earlier this year, Trump imposed a narrow set of semiconductor tariffs that pointedly exempted data centers. In May, US Trade Representative Jamieson Greer said tariffs were important but needed to arrive "on the right timing and in the right amount," with no immediate duties on companies producing semiconductors during a reshoring phase.
What shifted is unclear, but a Commerce Department report submitted July 1 that determines whether the data center exemption survives remains unpublished and is likely central to current lobbying. The CCIA has proposed a middle path: carve out semiconductors used in AI servers, lower the presumed 25 percent rate to 10 percent, and avoid stacking tariffs so firms pay a double tax on both the chip and the product containing it. A de minimis threshold based on weight or value could exempt products whose semiconductor content is incidental.
There are counterarguments to the industry's alarm. Reshoring semiconductor manufacturing is a genuine national-security priority, and every prior administration has struggled to move the needle without economic friction. TSMC's Arizona buildout, subsidies under the CHIPS Act, and continuing capacity expansion at Intel and Samsung's US operations do exist — the question is whether tariffs accelerate or sabotage that trajectory. Lutnick's position is that without a broad tariff, the reshoring incentive is too weak.
The distinction that matters for AI companies is between a policy that raises the cost of importing chips and one that also taxes the finished servers, GPUs, and consumer devices those chips end up in. The first is painful but survivable; the second, per the CCIA's modeling, delays one in five planned data centers and drags $90 billion out of annual GDP. For Nvidia, AMD, and the hyperscalers placing multi-year GPU orders, the difference is measured in whether AI infrastructure gets built in Ohio and Texas — or in Ireland and Malaysia.
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