Automakers, tech giants, and global allies warn of economic fallout as White House pushes chip levy plan. President Trump’s proposed tariffs on imported semiconductors have drawn widespread opposition from industries, trade groups, and global partners, who warn the move could disrupt supply chains and raise consumer costs.
President Donald Trump’s proposal to impose tariffs of up to 25% on imported semiconductors is facing mounting opposition from an unusually broad coalition of industries, companies, and global allies, highlighting growing concerns over the potential economic fallout from the plan.
More than 150 public comments submitted to the US Commerce Department reveal deep unease across sectors ranging from automotive giants to marine manufacturers, technology firms, and even cryptocurrency advocates. The opposition has united rivals like Tesla, General Motors, and Ford, as well as industry bodies such as the National Marine Manufacturers Association and the Crypto Council for Innovation.
At the centre of the debate are semiconductors — components now embedded in nearly every aspect of modern life, from smartphones and cars to refrigerators, medical devices, and even luxury toilets. Critics argue that tariffs would disrupt supply chains, inflate consumer costs, and undermine efforts to expand US manufacturing.
“There’s a large mismatch between the amount of chips we use in this country in various products and the supply created here in the US,” said JoAnne Feeney, partner at Advisors Capital Management. “Putting a tax on those imports will simply raise the cost, and that’s not a good thing for consumers.”
The marine industry, which relies heavily on imported electronics for navigation, propulsion, and safety equipment, has also voiced concern. The National Marine Manufacturers Association warned that many essential components have no US-made equivalent, leaving over 1,300 manufacturers vulnerable to price hikes.
The Commerce Department’s review follows President Trump’s broader effort to overhaul global supply chains and bolster domestic manufacturing, a central plank of his economic agenda. Despite acknowledging the goal of reducing reliance on foreign suppliers, many stakeholders argue the proposed tariffs could have unintended consequences.
In its submission, Taiwan Semiconductor Manufacturing Company (TSMC) highlighted its $165 billion investment in Arizona, which includes six chip fabrication plants, two packaging facilities, and a research centre expected to create thousands of US jobs. But the company warned that new tariffs could derail those plans, slow production timelines, and hamper efforts to strengthen America’s chip industry.
Tesla, in its filing, called for closer coordination between government and industry to avoid destabilising supply chains. “Impacts to these inputs for which there is insufficient domestic availability will put a strain on resources during a key moment in the global artificial intelligence race,” the company said.
Meanwhile, chipmaker Intel, which is spending over $100 billion to expand domestic production, cautioned that tariffs could trigger retaliatory trade measures, jeopardising US exports. The company urged the administration to exempt American-made wafers and chips produced abroad using US technology from the proposed levies.
A major concern echoed by TSMC, Intel, and others is the potential impact on high-end chipmaking equipment sourced from foreign suppliers, particularly the Netherlands-based ASML Holding NV. ASML’s extreme ultraviolet lithography machines, essential for producing the most advanced chips, carry price tags approaching $400 million. Tariffs on such equipment would significantly raise the cost of building US chip facilities.
Despite growing opposition, the White House remains firm. Spokesman Kush Desai said President Trump is determined to reshore manufacturing critical to national security, adding that the administration is pursuing policies to expand domestic production and reduce regulatory barriers.
The Commerce Department has yet to comment on the ongoing review.
As industries and global allies line up in opposition, the debate underscores the complex balancing act facing policymakers as they seek to boost US manufacturing without disrupting the very supply chains that underpin the modern economy.
