ADJUSTING IMPORTS OF SEMICONDUCTORS, SEMICONDUCTOR MANUFACTURING EQUIPMENT, AND THEIR DERIVATIVE PRODUCTS INTO THE UNITED STATES

Key Points

• President Donald J. Trump is placing a 25% tax on certain advanced computer chips imported from other countries starting January 15, 2026. This action is designed to encourage companies to build more factories in the U.S. and reduce the country's reliance on foreign technology.
• A Department of Commerce investigation found that the U.S. currently makes only 10% of the chips it needs, despite using 25% of the world's supply. Officials say this creates a national security risk because these chips are vital for everything from military missiles and radar to the nation's power grid and hospitals.
• The new tax includes several exceptions to help keep costs down for regular people and businesses. It will not apply to chips used in everyday consumer electronics, research and development, new startup companies, or U.S.-based data centers.
• Government officials will now begin 90 days of negotiations with other countries to try and improve trade deals. If these talks are not successful, the President may decide to add even more taxes to a wider range of computer parts and manufacturing equipment later this year.