Looming chip tariffs keep AI sector on edge despite 90-day pause

After weeks of whiplash — blanket “reciprocal” duties on April 2, a 90-day pause on April 9, China-specific rates raised to 145% on April 10 (though President Donald Trump indicated that he may reverse course), and a blanket exemption for most electronic goods on April 11 — tariff chatter has come down a bit from its peak, but AI developers, chipmakers, and the market are still waiting for more shoes to drop.

For the AI world, the looming worry is a planned tariff package on chips and the electronics that house them. In February, President Trump said semiconductor tariffs could start around 25%, and “go very substantially higher over a course of a year.” 

On April 14, the administration launched its initial investigation — under Section 232 of the Trade Expansion Act of 1962 — that could formally lead to semiconductor tariffs on national security grounds. While those investigations typically take as many as 270 days to complete, Politico reports the administration is hoping to move faster. 

There are still questions about how such tariffs would be applied. Semiconductor expert, Chris Miller, thinks they could take the form of “component tariffs” — calculating the duty based on the value of foreign-made components in the entire final product, not just the final product itself. 

But, as Miller points out, the complexity of semiconductor manufacturing means it’s unlikely the tariffs will bring chipmaking back to the United States in time to prevent significant price increases. Higher GPU and server costs would hit AI training budgets just as advertising-heavy giants like Google and Meta face softer consumer spending under broader tariffs. 

Whether the White House ultimately fine-tunes the plan is anyone’s guess; for now, the sector is stuck in wait-and-see mode.

-- CSET, USA.