US "delays" touted semiconductor tariffs amid economic concerns

Private discussions hint that Trump's chip tariff plan has been delayed.

The Trump administration’s aggressive plan to impose steep tariffs on imported semiconductors is reportedly being delayed. As some breathe a sigh of relief, others worry whether the proposed 100% tariffs will eventually be implemented. The delay appears tied to concerns about provoking China and disrupting access to critical inputs after positive talks in early November. For now, officials continue to balance political pressure and consumer price sensitivity.  

Comparatively, the EU is working to expand its semiconductor ecosystem with a new TSMC facility, but it could run into the same reshoring problems the U.S. is facing.

Trump’s semiconductor tariff plan delayed

Officials inside the Trump administration have quietly signaled that sweeping semiconductor tariffs, originally touted as 100% duties on foreign-made chips, may not be implemented anytime soon. While no formal reversal has been announced, the delay appears driven by broader geopolitical concerns and the risk of provoking China. The latter puts access to raw materials critical to U.S. manufacturing, namely rare earth metals, in peril.  

This pivot reflects the realpolitik of semiconductor supply chains. Trump’s proposed tariff framework, intended to coerce companies like TSMC into expanding U.S. operations, could also undermine critical supply routes if implemented poorly.  

Between 2019 and 2022, the U.S. imported more than 95% of the rare earths it consumed, according to the U.S. Government Accountability Office. Much of that supply comes from China, which dominates over 80% of global capacity. Thus, provoking Beijing through tariff actions could fracture a relatively fragile truce between the two nations.  

The optics of implementing a hardline tariff policy would also be received poorly against the backdrop of America’s present economic realities. With inflation weighing on consumers and manufacturing prices across industries steadily rising, imposing a 100% tariff on Chinese semiconductors would impact a wide array of products. Consumer electronics would be especially hard hit ahead of the holiday shopping season, further stretching wallets already in pain.  

Despite credibly reported whispers of a policy delay, White House and Commerce Department officials have downplayed the idea and reaffirmed their commitment to reshoring.  

A Commerce Department official told Reuters, “There is no change in department policy regarding semiconductor 232 tariffs.”  

White House spokesperson Kush Desai echoed the sentiment, saying, “The Trump Administration remains committed to using every lever of executive power to reshore the manufacturing that’s critical to our national and economic security.”  

However, the lack of follow-through since the tariffs were announced early in the administration’s time in power is telling. While the tariffs may not be scrapped, a meaningful delay seems likely given the tenuous trade relationship with Beijing. The question no one can answer is how long such a pause will last.  

Supply chain leaders should view it for what it is: a window of opportunity. The threat of tariffs remains on the table and the potential for abrupt enforcement could reshape sourcing strategies overnight. Therefore, companies should act now to assess their exposure and plan contingencies to avoid disruption.  

Sourceability can help customers navigate this uncertainty with our supply chain intelligence and risk assessment tools. By monitoring risky components on your BOM, we can provide early warnings to hedge against cost spikes and help identify cost-effective alternatives.

TSMC expands in Europe amid geopolitical shifts

Even as the U.S. weighs how to implement protectionist measures, Europe is quietly carving out its own strategy for bringing advanced chip production closer to home. Through a partnership with several European countries spearheaded by Germany, TSMC has announced plans to open a new fab near Dresden. Scheduled to begin production in 2027, the facility is part of a wider plan to help Europe double its current 10% share of advanced chip manufacturing.  

However, as witnessed in the deserts of Arizona, replicating TSMC’s laser-focused production model outside Taiwan comes with significant hurdles. The success of TSMC’s domestic operations is built not only on its engineering leadership, but also a dense ecosystem of materials, equipment suppliers, and labor. Partners have spent years fine-tuning their processes to meet the lofty needs of the world’s largest chipmaker.  

In Germany, much of this support infrastructure does not yet exist. As with its U.S. expansion, the Taiwanese giant will need to invest heavily to reestablish its supplier network on European soil. The challenge is greatest for specialty chemicals and advanced manufacturing tools source primarily from Asia. Domestic labor challenges can’t be ignored either.  

This is in part due to local regulatory environments like complex permitting structures, stringent environmental guidelines, and rigid labor protections. In Europe, all of these differ from Taiwan’s fast-moving industrial zones and workplace culture.

TPC Germany is the local subsidiary of Taiwan Puritic, the firm responsible for manufacturing gas pipes for TSMC’s sprawling factories. A company spokesperson working in Germany cited issues including bureaucratic delays involving visa approvals, workforce integration challenges, and difficulties adapting to local employment norms.

The expansion project has also sparked political debate back in Taiwan. Some officials and citizens see the move as eroding a key element of the island’s geopolitical leverage—one of the few shields protecting it from Chinese aggression. As Taiwan’s silicon advantage becomes diluted across continents, some fear that shield could weaken, leaving it vulnerable.  

Europe, for its part, has good reason to pursue autonomy. The recent Nexperia controversy has underscored how fragile the region’s semiconductor position is. By bringing TSMC to European soil, EU leaders hope to secure a sovereign chip supply that is less affected by foreign pressure or trade disputes.  

Regardless of location, it’s clear that reshoring chip production is far more complex than building fabs. Yet, as the fissures in global geopolitical relations deepen, doing so becomes more critical. Semiconductor companies and their buyers alike must learn to navigate a world where strategic regional clusters, not global integration, may define the next chapter of supply chain logistics.