If Trump's new threat of massive 100% tariffs on chips from Taiwan comes true an RTX 5090 for $2,000 will seem cheap

Nvidia RTX 5090 Founders Edition graphics card on different backgrounds
(Image credit: Future)

If $2,000 for Nvidia's toasty new RTX 5090 graphics card feels a little steep, things might be about to get a whole lot more expensive. Speaking to Republicans at a conference in Miami on Monday, President Trump threatened to impose up to 100% tariffs on chips from Taiwan.

"In the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals to return production of these essential goods to the United States of America,” Trump said.

It is of course TSMC in Taiwan that makes many of world's most advanced chips, including both Nvidia's outgoing RTX 40 GPUs and the new RTX 50 family.

Trump's justification for the move involves incentives to force chip designers like Nvidia and indeed its rival AMD to produce more of their products in the US. "They needed an incentive. And the incentive is gonna be they’re not gonna wanna pay a 25, 50 or even a 100% tax," Trump said.

He also clearly called out Taiwan as his chief target. "They left us and went to Taiwan, which is about 98% of the chip business," he said.

Trump argued that tech companies will build new chip production factories or fabs in the US in order to avoid paying the tariffs. Whether that would indeed be the case, what is certain is that it takes many years to construct a new fab and have it producing chips at decent yields.

That process takes even longer if you're talking absolute cutting-edge chip production. That means the Trump administration is in a tricky spot if it wants to impose tariffs.

Trump chip tariff

(Image credit: CPSAN)

If it does so in the near term, there won't be time for those fabs to be built and come online, so costs will go up for chip makers, in turn amplifying the risk that prices for consumers in the US increase.

A possible alternative is to set a future date for tariff imposition. The problem with that approach is that term limits for presidents in the US constitution unambiguously prevent Trump from running again in four years.

That said, in the speech Trump questioned whether he could run again. "I'm not 100% sure," Trump said, adding, "I think I'm not allowed to run again, I'm not sure."

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(Image credit: Future)

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Trump could impose tariffs towards the end of his term only to see them immediately revoked, just as Trump himself immediately revoked a whole slew of Biden administration executive orders in his first day in office.

Of course, it's true that some chip production is already being brought back to the US. We recently reported that AMD has started producing Ryzen 9000 CPU dies at TSMC's Arizona fab. But, again, that move was many years in the making. TSMC has suggested it would expand further in the state, with help from Biden's CHIPS Act cash.

Anyway, for now there's no clear indication when any tariffs may hit or exactly the level at which they are pitched. But even a 25% tariff on all chips from Taiwan would very likely push up the price of PC components dramatically in the US, let alone a 50% or 100% tariff.

Trump has also promised to reverse inflation, and fast. "When I win, I will immediately bring prices down, starting on day one,” Trump said in August. That's not going to be easy with hefty tariffs applied to imports, that's for sure.

TOPICS
Jeremy Laird
Hardware writer

Jeremy has been writing about technology and PCs since the 90nm Netburst era (Google it!) and enjoys nothing more than a serious dissertation on the finer points of monitor input lag and overshoot followed by a forensic examination of advanced lithography. Or maybe he just likes machines that go “ping!” He also has a thing for tennis and cars.

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