Silicon siege: Trump’s 100% tariff threat puts chips in the crosshairs, offers golden bridge to Apple

In typical Trumpian fashion, the President has thrown a live grenade into the global semiconductor supply chain—and then offered Apple a velvet escape route. With a pledge to impose 100% tariffs on all imported chips and semiconductors, Trump is trying to engineer a hard pivot toward domestic tech manufacturing. But rather than a blanket crackdown, he’s wielding the tariff sword with calculated precision, carving out golden exemptions for those willing to “Make It in America.”

Flanked by Apple CEO Tim Cook in the Oval Office, Trump announced that firms investing in U.S. manufacturing would be shielded from the new levies. Apple, always quick to read the winds in Washington, seized the moment with a flashy $100 billion pledge to ramp up domestic investment, bringing its U.S. commitment to $600 billion over the next four years. The White House called it a “win for our manufacturing industry”; markets called it a win for Apple, sending the stock up 3% in after-hours trading.

Trump’s tariff threat is no idle bluff. It lands just hours before his broader "reciprocal tariff" regime goes live, targeting trade partners from the EU to Japan. While the move smacks of protectionism, it’s also being pitched as a tactical play to secure America’s lead in advanced technologies—particularly AI and semiconductor design.

The targeting couldn’t be more precise. Nvidia, the crown jewel of AI chip design, and Taiwan Semiconductor Manufacturing Company (TSMC), its principal foundry, were both name-checked as potential beneficiaries—so long as they keep investing in U.S. capacity. Nvidia CEO Jensen Huang also met with Trump earlier in the day, underscoring just how central chipmakers are to this latest White House push.

The backchannel diplomacy with Silicon Valley marks a stark shift from earlier hostilities. Trump had previously slammed Apple for offshoring iPhone assembly to India and had threatened them with tariffs if they didn’t bring manufacturing home. But now, with Cook presenting the president a gold-plated glass plaque made in America—and Apple committing to source 100% of iPhone and Watch cover glass from Kentucky—the frost seems to be thawing.

Even so, technology experts warn that reshoring complex supply chains is no slam dunk. Less than 5% of the iPhone’s components are currently made in the U.S., and the domestic ecosystem lacks the scale, tooling, and specialized labor to meaningfully rival Asia’s entrenched networks. Corning’s $2.5 billion investment and other deals with Applied Materials, GlobalWafers, Broadcom, and Texas Instruments are steps in the right direction, but they may not be enough to fully offset margin pressure or avoid eventual consumer price hikes.

Indeed, Apple has already warned of $1.1 billion in potential tariff-related costs for the September quarter alone. But the company also saw a boost in U.S. sales last quarter, as consumers rushed to buy ahead of the anticipated price hikes—a quirk of policy-induced frontloading that might not last.

Meanwhile, the administration’s Section 232 investigation into global chip trade continues to loom large. Should the findings justify further trade restrictions, even Apple’s carve-outs may prove temporary. For now, though, Cupertino has navigated the tariff gauntlet with deft political choreography, and walked away with both policy favors and market applause.

As Trump sharpens his economic nationalism ahead of the election, one thing is clear: the chips are down—but if you invest in America, he’ll deal you back in.