The Donald Trump administration is reportedly considering sweeping new tariffs on imported semiconductors while simultaneously crafting exemptions designed to protect big tech’s AI expansion.
Tariffs With Targeted Relief For AI Giants
The Commerce Department is planning a system of tariff carve-outs that would spare U.S. hyperscalers such as Amazon.com, Inc. (NASDAQ:AMZN), Microsoft Corp (NASDAQ:MSFT) and Alphabet Inc.’s (NASDAQ:GOOG) (NASDAQ:GOOGL) Google from higher chip costs, reported the Financial Times on Monday, citing people familiar with the matter.
The move comes as companies race to build data centers that power the artificial intelligence boom.
TSMC Investment Tied To Exemptions
At the center of the plan is Taiwan Semiconductor Manufacturing Company (NYSE:TSM), the world’s leading contract chipmaker and a key supplier to U.S. technology companies.
The exemption framework would link tariff relief to the scale of TSMC’s investments in American manufacturing, the report said.
TSMC has pledged to invest $165 billion to expand its U.S. footprint, part of Washington’s broader effort to reduce reliance on foreign chip production.
Under a U.S.-Taiwan trade agreement, Taiwanese firms building semiconductor plants in the U.S. would be allowed to import chips tariff-free in proportion to their planned domestic capacity.
TSMC would then be able to pass those exemptions on to its U.S. customers.
White House Keeps Pressure On
While the carve-outs offer relief, administration officials stressed the plan is still evolving.
One official told the publication that policymakers will closely scrutinize the program to ensure it does not become “a giveaway to TSMC” and that it aligns with the administration’s broader tariff goals.
TSMC, the Commerce Department and White House did not immediately respond to Benzinga’s request for comments.
Limited Tariffs Already In Place
In January, the Trump administration imposed 25% tariffs on a narrow group of chips re-exported by Advanced Micro Devices, Inc. (NASDAQ:AMD) and Nvidia Corp (NASDAQ:NVDA).
The move enforced a White House deal allowing Nvidia to ship its H200 chips to China in exchange for a 25% government cut of sales.
Currently, only a narrow set of chips imported into the U.S. and then re-exported to China are subject to tariffs. Chips used for domestic AI infrastructure have so far been excluded.
Price Action: In after-hours trading, Amazon shares rose 0.077%, Microsoft gained 0.49%, while Alphabet’s Class A shares slipped 0.018% and Class C shares fell 0.083%, according to Benzinga Pro.
Amazon shares score highly on Benzinga’s Edge Stock Rankings for quality, but show a negative price trend across short, medium and long-term time frames.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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