The United States has announced plans for semiconductor tariffs in response to a ruling on reciprocal tariffs, but experts believe the likelihood of implementation is low. While President Donald Trump may expand tariffs on goods, analysts argue that semiconductor tariffs would not benefit the U.S. and could drive up domestic prices.
The absence of viable alternatives to Korean memory semiconductors further complicates the imposition of such tariffs. Nevertheless, the South Korean semiconductor industry remains on high alert, as President Trump has signaled his intention to announce new tariffs.
Industry sources reported on Monday that President Trump announced on Saturday via Truth Social his plan to increase global tariffs from 10% to a legally verified maximum of 15% on many countries that have exploited the U.S. without consequences. As a result, the U.S. government will raise the global tariff from 10% to 15% starting at 12:01 AM on February 24.
The Korea International Trade Association noted that Section 232 of the U.S. Trade Expansion Act allows for swift adjustments to target items and tariff rates through presidential proclamations. They added that the White House has suggested expanding tariff measures on semiconductors and related products soon, depending on negotiations with key countries.
In fact, President Trump has consistently hinted at the possibility of imposing semiconductor tariffs even before the recent Supreme Court ruling.
While the South Korean semiconductor industry acknowledges the clear risk of tariff increases, many believe that implementing such tariffs will be challenging for President Trump.
An industry insider commented that the possibility of semiconductor tariffs has been discussed before, but said they would not be easy to implement. The person explained that tariffs are meant to protect domestic companies, yet semiconductor tariffs could harm U.S. firms, which is why they haven’t been imposed so far.
Another semiconductor industry representative said that if such tariffs are imposed, the burden would inevitably fall on U.S. customers, including big tech companies. That, they added, would push prices higher across the U.S. economy and raise doubts about the policy’s feasibility.
Industry experts agree that if semiconductor tariffs are established, U.S. companies like NVIDIA will bear the brunt. As semiconductor prices rise, product prices will inevitably increase.
Notably, the U.S. Personal Consumption Expenditures (PCE) price index rose by 2.9% in December compared to the previous year, exceeding expectations. It also increased by 0.4% from the previous month. The Wall Street Journal reported on January 16 that U.S. companies have been announcing price hikes since the new year began. Having exhausted cost-cutting measures in other areas, they are now passing tariff-related price increases on to consumers. The resulting inflation from semiconductor tariffs could pose a significant challenge for the Trump administration.
With South Korea controlling over 70% of the global memory semiconductor market and the U.S. lacking viable alternatives, experts suggest that implementing semiconductor tariffs will be difficult.
Moreover, given the ongoing AI rivalry with China, increasing burdens on domestic big tech companies could be counterproductive. A semiconductor industry representative stated that imposing semiconductor tariffs would not serve President Trump’s national interests.
Both the government and industry remain vigilant, believing that the U.S. will maintain its current tariff policy.
An official from South Korea’s Ministry of Trade, Industry, and Energy stated that the possibility of U.S. semiconductor tariffs remains open. They noted that now that mutual tariff negotiations between the U.S. and Taiwan have concluded, semiconductor tariffs could be next. An industry source added that because only mutual tariffs are being discussed at the moment, it’s difficult to predict what will happen, and for now, the situation can only be monitored closely.