'Make it in America or pay the price': Commerce secretary formalizes semiconductor tariffs

US Commerce Secretary Howard Lutnick warned Wednesday (local time) that semiconductors not manufactured in the United States would face steep tariffs.

Lutnick made the remarks in an interview with CNBC on the sidelines of the G20 Innovation Ministers Meeting in Chapel Hill, North Carolina, describing the approach as a "targeted and thoughtful" tariff policy.

"Basically, the policy is: if you make it here, you don't pay tariffs. But if you don't make it here, be prepared to pay to enter the greatest market in the world," he said. Lutnick also confirmed a Politico report that the tariffs on semiconductors would be steep and structured to link chip manufacturing investment in the United States to tariff relief, saying the report was "exactly right."

Politico had earlier reported that the US government was considering significantly expanding the range of products subject to semiconductor tariffs. Under the plan, the duties could cover not only chips themselves but also finished goods containing semiconductors — including laptops, gaming consoles and data center servers. The report also said officials were weighing country-specific tariff rates and quotas, as well as country-specific guidelines targeting major chipmakers.

Lutnick drew a parallel with the pharmaceutical sector. "We gave tariff relief to companies that manufactured innovative medicines in the United States and implemented most-favored-nation pricing. You can expect the same approach for semiconductors," he said, signaling that domestic production would be the key to avoiding duties.

He said the policy was already delivering results in the semiconductor sector, pointing to TSMC's expanded investment in the United States. "TSMC is building a $265 billion semiconductor factory in Arizona, and Micron is building a $250 billion memory chip factory. Those two companies alone add up to more than $500 billion. That is what Trump's tariff policy looks like when it's working," he said.

Lutnick added that the United States had secured $1.2 trillion in investment commitments to build semiconductors domestically. "When we came in, the US share of global semiconductor production was less than 2 percent. Now we are heading toward 40 percent, and if Intel succeeds, we will hit 50 percent by the time we leave," he said. He also predicted that Taiwan's government would announce an additional $20 billion to $30 billion in US investment commitments as early as next week.

The US government began imposing semiconductor tariffs on select products in January and has signaled it would extend the duties more broadly across the chip sector.

President Donald Trump signed a proclamation in January imposing a 25 percent tariff on semiconductors — such as Nvidia's AI chip H200 — that are imported into the United States and then re-exported to other countries. At the time, the White House said Trump could impose broader tariffs on semiconductor imports and related products in the near future to encourage domestic manufacturing, and could introduce a corresponding tariff offset program.

US Trade Representative Jamieson Greer said in May that comprehensive tariffs on semiconductors would be imposed at the appropriate time, and that chipmakers relocating their production facilities to the United States would be allowed a certain volume of imports.