Lutnick: Trump gov't considering 'targeted,' thoughtful' tariff policy for semiconductors
U.S. Secretary of Commerce Howard Lutnick listens as NVIDIA CEO Jensen Huang speaks during the G20 Innovation Ministerial in Chapel Hill, North Carolina, on Wednesday. AFP-Yonhap
WASHINGTON — U.S. Commerce Secretary Howard Lutnick said Wednesday that President Donald Trump's administration is working to craft a "targeted" and "thoughtful" tariff policy for semiconductors, reiterating that companies that produce products in the United States would not pay duties.
During a CNBC interview, Lutnick confirmed that the administration is working on the envisioned tariffs, after Politico, a media outlet, reported last week that it is weighing new chip tariffs despite warnings from tech companies that the move could doom U.S. hopes of dominating artificial intelligence.
"I think what you're going to see is targeted, thoughtful tariff policy that basically says if you build here, you don't pay, but if you don't build here, expect to pay to enter the greatest market in the world," the secretary said.
Asked to confirm the Politico report that he favors a structure tying foreign companies' tariff relief to investment in U.S. chip manufacturing, Lutnick said, "Yeah. It's exactly right."
"If you build in America, we will give you tariff relief, and if you don't build in America, then you will pay tariffs, and that's pretty much a very sensible way of doing things," he reiterated.
In its report last week, Politico said that one tariff approach under consideration would dramatically expand the number of tech products subject to the duties, affecting not just chips but potentially many of the goods made with them, such as laptops, gaming consoles or the servers that fill data centers.
The report also said that one idea under consideration would set separate tariff rates and quotas for individual countries, with country-specific guidance covering their major semiconductor manufacturers.
The secretary said the chip tariff policy would follow a similar approach to the administration's policy on pharmaceutical imports.
"Look at the way the administration dealt with pharmaceuticals," he said.
"We all worked together as sort of one government, right? We gave tariff relief to companies who built their innovative pharmaceuticals in America and did MFN (most-favored-nation). So that's what you should look for in semiconductors," he added.
South Korean chipmakers Samsung Electronics Co. and SK hynix have been closely watching the Trump administration's tariff policy as it could affect their business activities in the U.S.
The Trump administration has been doubling down on its tariff policy to boost domestic manufacturing, reduce America's trade deficit, and increase federal revenue and foreign investment.