During a recent event, former President Donald Trump announced that the chip manufacturer TSMC has pledged an additional $100 billion towards producing semiconductors in the United States. This decision comes after Trump threatened the company with tariffs of up to 100%. TSMC had already committed $65 billion for U.S. chip production and had received a $6.6 billion subsidy under President Biden’s administration, a decision Trump has criticized.
Trump highlighted that TSMC promised to enhance its semiconductor manufacturing efforts in the U.S., partially due to incentives from the Biden administration, but he claims the company increased its investment following his tariff threats. Speaking at a Republican National Congressional Committee event, Trump criticized Biden’s $6.6 billion grant to TSMC, part of the 2022 CHIPS and Science Act designed to support semiconductor facilities in Phoenix. The funding was finalized before Biden left office.
In March, TSMC, alongside Trump, revealed an additional $100 billion investment for U.S. chip production. Trump emphasized that this agreement was achieved without additional stimulus. He stated during the event that his strategy involved warning TSMC of potential taxes ranging from 25% to 100% if they did not establish their plant in the U.S.
TSMC has not commented on these developments. Despite Trump’s past criticisms of government subsidies to companies, he had previously attempted to bring TSMC to the U.S. during his initial term. Since returning to the presidency, Trump has aimed to repeal the $52.7 billion CHIPS Act, facing opposition from some Republican senators whose states have benefited from the funding.
Addressing the subsidies, Trump commented that chip companies, despite receiving significant funding to build U.S. plants, do not always construct them domestically. Additionally, Trump has declared a 90-day suspension on the stringent “Liberation Day” tariffs introduced recently, opting instead for a 10% base tariff on all countries except China. While semiconductors are exempt, Taiwan—where the majority of the world’s semiconductors originate—is still subjected to a 32% tax under the tariffs affecting products manufactured abroad.
Trump has previously issued similar threats to other corporations. He warned manufacturer John Deere of potential 200% tariffs unless it ceased plans to relocate some production from the Midwest to Mexico. During his first administration, Trump also targeted General Motors, threatening to remove its federal subsidies following the company’s announcement to close several U.S. plants.
This report was initially published on Fortune.com.
