Donald Trump says no country is ‘off the hook’, warns he will target the ‘whole electronics supply chain’
Donald Trump has announced an urgent national security investigation as one of the world’s largest sectors sits nervously on the cusp of a devastating new tariff.
World
Don't miss out on the headlines from World. Followed categories will be added to My News.
President Donald Trump has confirmed he’ll announce new tariffs on imported semiconductors within the next week in another geopolitical power play dressed up as industrial policy.
Speaking aboard Air Force One on Sunday, Mr Trump said the White House was working to “uncomplicate” its wildly ambiguous policies to encourage domestic chip manufacturing, while leaving room for some exceptions.
The 78-year-old then announced a national security investigation into the electronics supply chain, signalling that the exclusions granted just 48 hours earlier may have been more stopgap than strategy.
“We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN,” he wrote on social media, in characteristic block caps.
The decision to exempt smartphones and computers from his sweeping reciprocal tariffs sparked modest optimism in the tech sector. But Commerce Secretary Howard Lutnick clarified on Sunday that those items, along with semiconductors and pharmaceuticals, will be captured under a separate tariff “bucket” in the coming months.
“All those products are going to come under semiconductors, and they’re going to have a special focus type of tariff to make sure that those products get reshored,” Mr Lutnick said.
“We need to have semiconductors, we need to have chips, and we need to have flat panels — we need to have these things made in America. We can’t be reliant on South-East Asia for all of the things that operate for us.”
So what does it all mean?
MORE: Aussies to get $5k back amid US tariffs
A semiconductor is a material — usually made from silicon — that can conduct electricity under certain conditions but not others, making it an ideal medium for controlling electrical currents. That’s the basic scientific definition.
In short, they sit at the heart of just about every piece of consumer tech in the world, meaning their ready availability is essential to countless industries in a market worth trillions.
The process of manufacturing advanced semiconductors is so complex that only a handful of companies in the world can do it. Companies use extremely advanced tools, often sourced from multiple countries, to create the high-tech components. This makes supply chains fragile and highly dependent on global co-operation, especially with countries like Taiwan, South Korea, Japan, the Netherlands and China.
Because semiconductors are so critical to modern civilisation, control over production has become a strategic priority for global superpowers.
MORE: $115bn wiped: Trump’s rich listers hefty fall
Mr Trump essentially wants to reshore chip production to reduce reliance on Taiwan and China, while Beijing wants to build its own domestic chip industry to escape US export bans.
Meanwhile, Taiwan’s chip dominance has made it both an economic gem and a geopolitical flashpoint, with China repeatedly airing propaganda asserting its position over the tiny nation sitting off its shores.
The ideal outcome in Mr Trump’s playbook is that the US sells their own semiconductors in-house. The problem is, the nation doesn’t currently produce enough.
Companies like Intel, GlobalFoundries, and Micron are ramping up with government incentives, but analysts predict it will take years to match Asian manufacturing capacity.
The car industry, already strained by chip shortages during Covid, could also see price hikes and production slowdowns.
Mr Trump’s handling of the situation has drawn the ire of many of his critics in the US.
Sven Henrich, founder and lead market strategist for NorthmanTrader, said the fluidity of the administration’s messaging was a sign of poor leadership.
“Sentiment check: The biggest rally of the year would come on the day Lutnick gets fired,” Henrich wrote on X.
“I suggest the administration figures out who controls the message, whatever it is, as it changes every day. US business can’t plan or invest with the constant back and forth.”
Meanwhile veteran Democrat Elizabeth Warren summed it all up with two words.
“There is no tariff policy – only chaos and corruption,” Warren said on ABC’s “This Week”.
As the chaos inside Washington reverberates around the globe, China has now sought to present itself as a stable alternative, courting countries spooked by the global economic storm.
Xi Jinping will visit Malaysia Cambodia and Vietnam, seeking to tighten regional trade ties and with plans to meet his three Southeast Asian counterparts.
The fallout from Mr Trump’s tariffs — and subsequent whiplash policy reversals — has sent particular shockwaves through the US economy, with investors dumping government bonds, the dollar tumbling and consumer confidence plunging.
Adding to the pressure on Mr Trump, Wall Street billionaires — including a number of his own supporters — have openly criticised the tariff strategy as damaging and counter-productive.
The White House, however, insists the aggressive policy is bearing fruit, saying dozens of countries have already opened trade negotiations to secure a deal before the 90-day pause ends.
“We’re working around the clock, day and night, sharing paper, receiving offers and giving feedback to these countries,” Greer told CBS.
Originally published as Donald Trump says no country is ‘off the hook’, warns he will target the ‘whole electronics supply chain’
China’s major win in Trump trade war
China is locked in the mother of all trade wars with Donald Trump. Today, the superpower revealed how things are going.
Shocking sight on UK streets, army called in
Vomit-inducing scenes are playing out on the streets of the UK’s second biggest city and it’s so bad the army has got involved.