In a bold statement that may reshape the future of global chip manufacturing, former U.S. President Donald Trump on Tuesday threatened Taiwan Semiconductor Manufacturing Co. (TSMC) with a 100% tax if it fails to expand its production capacity within the United States. This comes as the semiconductor industry sits at the center of geopolitical, economic, and technological tensions between major global powers.
Trump took a direct shot at the Biden administration’s $6.6 billion subsidy granted to TSMC’s U.S. operations, calling it unnecessary. Speaking at a Republican National Congressional Committee event, he stated:
“We didn’t hand out billions — we told them we’d tax them 100% if they didn’t bring manufacturing here.”
According to Trump, the approach of using trade pressure rather than financial incentives was more effective during his presidency in attracting foreign investment into U.S. soil.
Despite the criticism, TSMC appears committed to expanding its footprint in the U.S. semiconductor ecosystem. In March 2025, the company announced:
$100 billion investment in U.S. operations
Construction of five additional chip plants in Phoenix, Arizona
A long-term goal to diversify its production base beyond Taiwan
This move aligns with Washington's goal of boosting domestic chip manufacturing to reduce dependence on Asian supply chains.
However, TSMC is now facing more serious issues beyond political pressure. According to Reuters, the company is being investigated for violating U.S. export control laws after one of its chips was reportedly found in a Huawei AI processor.
TSMC may face over $1 billion in penalties
The incident could have far-reaching implications for U.S.-China tech regulations
It adds fresh urgency to U.S. efforts in tightening semiconductor supply chain security
This development intensifies the spotlight on the semiconductor race among the U.S., China, and Taiwan. Key takeaways include:
National security concerns are now dictating chip policy
Companies like TSMC must balance political pressure from both East and West
Future subsidies and incentives may be re-evaluated amid public scrutiny
With Trump eyeing a potential 2024 comeback, the rhetoric on trade and manufacturing could influence future legislation and industrial policy.
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Trump's 100% tariff warning sends a clear message: U.S. chip manufacturing is no longer optional for foreign tech giants. While TSMC ramps up its American investments, legal challenges and political pressure could shape its strategy in unpredictable ways. The broader takeaway? Semiconductors aren’t just tech—they’re geopolitics.
