Trump’s new tariffs might make your next phone more expensive

Technology is everywhere, from our phones to TVs, and it all starts with tiny chips made of silicon. But making these chips isn’t easy, and right now, one major company in Taiwan is in the spotlight because of new U.S. tariffs.

What’s Happening?

President Donald Trump has announced plans for tariffs as high as 100% on chips coming from Taiwan. He made these comments at a recent conference in Miami, stating, “In the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors, and pharmaceuticals to bring these jobs back to America.” He pointed out that companies have moved their production to Taiwan.

Who Does This Affect?

This mainly targets Taiwan Semiconductor Manufacturing Company (TSMC), which makes most of the world’s advanced chips. They produce chips for big names like Apple, Google, and Nvidia. If these tariffs go through, it could mean higher prices for many tech gadgets.

What Does This Mean for Consumers?

For those who love gadgets, this could mean pricier phones. Tech expert Marques Brownlee explained that the chip is often the most costly part of a smartphone. A 100% tariff could increase a $500 phone’s price to $700, which is a 40% jump. This would affect all devices using Taiwanese chips.

Why Is This Happening?

The idea is to encourage companies to produce chips in the U.S. instead of Taiwan. While the U.S. has companies like Intel, they’re not as advanced as TSMC. TSMC does have a plant in Arizona, but it produces far fewer chips compared to its factories in Taiwan.

Can the U.S. Compete?

Yes, but it would take a lot of money and time. To match TSMC’s output, the U.S. would need to build many new factories. Each factory costs billions, takes years to build, and needs thousands of workers. Not to mention, there would be huge demands for materials like concrete and steel.

What’s the Response from Taiwan?

Taiwan has pointed out that their relationship with the U.S. in tech is beneficial for both countries – the U.S. designs, and Taiwan makes the chips. However, with the current political climate, these tariffs could become reality any day, impacting both economies and technology prices around the world.