Chip tariffs will hit 25 percent by April — and then go higher

President Donald Trump said that he expects the U.S. government to impose chip tariffs of 25 percent by April 2, adding to the woes of tech buyers already burdened by high prices. But that’s not all, as Trump said he expects to raise them even more over the course of 2025.

Trump was quoted by CNN and other publications, speaking from his resort in Mar-a-Lago, Florida. During the same conversation, Trump said he plans to apply automotive tariffs of 25 percent, plus the same for pharmaceuticals as well.

The idea, apparently, is to push foreign chipmakers to invest in U.S. chip manufacturing, rather than import the semiconductors into the U.S. form foreign factories. “We want to give them a little bit of a chance,” CNN quoted Trump as saying.

Trump’s Commerce Department already plans to assess a 10 percent tariff on goods imported from China beginning in March, which the Consumer Technology Association has warned will force consumer tech prices up to sky-high levels. The tariff, a tax put on imports to encourage domestic manufacturing, is largely expected to be directly passed along to consumers. Acer has already said as much, planning to raise the prices of PCs by 10 percent in March.

It’s not clear how the chip tariffs would affect consumers. As most people know, electronics products from TVs to PCs include many several discrete chips, including CPUs, GPUs, and discrete controllers of all types. Some, like Intel’s CPUs, include chiplets manufactured by both Intel and foreign manufacturers like TSMC. How the tariffs would affect an Intel CPU, for example, is anyone’s guess. Rumors have already circulated that some parts of the Trump administration have encouraged TSMC to take a stake in Intel, though the White House has been quoted saying that they don’t believe that Trump is actually in favor of such a move.

Nvidia’s GeForce 5000 series of GPUs can already reach a whopping $2,000, with card makers jacking up the prices even more to the neighborhood of $3,000. Tack on an additional 25 percent, and that’s $3,750, potentially.

But wait, there’s more. Trump followed up by saying that the chip tariffs would go up even more. “It’ll go substantially higher over a course of a year,” Trump said, according to CNN, as he wanted to give time for those manufacturers to build more factories in the U.S.

(According to Bloomberg, Trump said that the chip tariffs would go “very substantially higher” instead.)

At some point, a high-end GPU will start pushing into used-car territory — although those prices will probably rise in response to the new-car tariffs, too.