How Trump’s 100% Chip Tariff Could Shake Up Tech Supply Chain

In the 1800s, gold was power. In 2025, it’s semiconductors.

On Wednesday, August 6th, Donald Trump announced a sweeping 100 percent tariff on imported chips, unless they’re made in America or from companies actively reshoring production. It’s not just a headline grab. It’s the latest move in a high-stakes global chess game where control over chip supply chains means control over innovation, defence, and economic leverage.

“So in other words, we’ll be putting a tariff of approximately 100 percent on chips and semiconductors. But if you’re building in the United States of America, there’s no charge,” Trump said.
“Even though you’re building and you’re not producing yet, in terms of the big numbers of jobs and all of the things building, if you’re building, there will be no charge.”

Behind the politics lies a bigger story. America’s 71 billion dollar monthly trade deficit has become the rallying cry for a manufacturing renaissance. And with TSMC building two massive foundries in Arizona, the battle to dominate the next generation of technology is moving from Taiwan to U.S. soil.

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Apple’s $100 Billion Bet on America’s Tech Future

Just months after political tensions and supply chain shocks rocked the tech world, Apple quietly doubled down on American resilience.

The company has committed an additional 100 billion dollars to U.S. suppliers over the next four years, bringing its total domestic investment to an eye-watering 600 billion dollars and adding 1,000 new jobs to the U.S. labour market.

At the heart of this shift is the new American Manufacturing Program, a nationwide alliance of innovation.

Apple has joined forces with an elite roster of partners: Corning for precision glass, Coherent and GlobalWafers for chip materials, and Broadcom, GlobalFoundries, and Texas Instruments to secure next-gen components.

When Chips Double in Price, Who Pays the Price?

A 100 percent tariff means foreign chipmakers entering the U.S. will suddenly cost double. This could price them out of the market entirely unless they absorb the cost and suffer margin compression or pass it on through higher prices.

The issue? If many companies choose the latter, it could trigger widespread chip shortages, especially in the short term. The U.S. currently doesn’t produce enough chips to meet domestic demand, and developing new manufacturing capacity takes two to five years.

In short, the tariff could cause near-term pain and shortages, particularly in fast-moving, high-volume sectors, while the U.S. rushes to rebuild its semiconductor supply chain. Long term, it reshapes global chip logistics, but the adjustment period could be volatile, inflationary, and fragmented.

Disruption of Global Partnerships

Semiconductor supply chains are some of the most globally entangled in modern industry, with design, fabrication, testing, and packaging often taking place in entirely different countries.

A 100 percent tariff on imported chips doesn’t just raise costs, it fractures the very economic logic of this international collaboration.

TSMC controls more than 60 percent of global foundry output, and while its expansion into Arizona strengthens U.S. supply, the ripple effects land overseas. Higher costs, shifting lead times, and new sourcing rules can slow innovation in foreign markets, making it harder for startups and new tech ventures to prototype, scale, and compete.

The New Risk Facing Foreign Small-Cap Chipmakers

When I think about BrainChip (ASX: BRN) and small caps like it, the real risk is the forced choice created by a U.S. tariff regime. If your chips are built offshore, selling into America suddenly gets more expensive, which squeezes margins or slows demand. To stay competitive, you either partner with an American foundry such as GlobalFoundries or SkyWater, or you license the IP to a U.S. manufacturer.

Both paths take time and money, new PDKs, new masks, new qualifications, while cash burn is already high because R and D drives the whole story.

If a device uses 20 dollars of chips and tariffs double that line to 40 dollars, a small cap selling a 100 dollar module sees its gross margin fall from 40 dollars to 20 dollars unless the price rises or costs are removed elsewhere. The reason this becomes an issue is that Fab capacity does not appear overnight. A typical plant takes two to five years to plan and ramp, so in the near term the transition window is where smaller companies feel the most pain. Higher costs and longer timelines increase the chance of execution slips, which raises the risk of failure for early-stage teams.

The cause and effect is clear. Policy pressure pushes production onshore, large established foundries that are already in the U.S. gain bargaining power, and the innovation pace for foreign startups can slow while they retool their supply chains. Net, I see a tougher near term for offshore fabless small caps, and a relative tailwind for U.S. based manufacturing partners who can offer immediate, tariff clean supply.