Trump’s prices threaten the renewal of American semiconductors

Silicon Valley pushed a sigh of relief on Wednesday when he learned that President Donald Trump’s price at the rate included an exemption for semiconductors, which, at least for the moment, will not be subject to higher import rights. But three days later, some American technological companies can see that the flaw actually creates more problems than it solves. After the announcement of the prices, the White House has published a list of products which, according to them, are not affected, and it does not include many types of products related to fleas.

This means that only a small number of American manufacturers will be able to continue to obtain fleas without the need to take into account higher import costs. The vast majority of semiconductors that enter the United States are already packaged in products that are not exempt, such as graphic processing units (GPU) and servers for the formation of artificial intelligence models. And the manufacturing equipment that national companies use to produce fleas in the United States has also not been spared.

“If you are a large flea producer who makes a considerable investment in the United States, a hundred billion dollars will buy you much less in the coming years than in recent years,” explains Martin Chorzampa, main member of the Peterson Institute for International Economics.

The United States Ministry of Commerce has not responded to a request for comments.

Stacy Rasgon, a main analyst covering the semiconductors of Bernstein Research, says that the narrow exception for fleas will not do much to blunder wider negative impacts on the industry. Given that most semiconductors arrive at the American borders wrapped in servers, smartphones and other products, prices represent “something in the stage of a mixed 40% price on this genre,” said Rasgon, referring to the overall rate of applied import rights.

RASGON notes that the semiconductor industry depends deeply on other imports and the overall health of the American economy, because the components it is found in many types of consumer products, from cars to refrigerators. “They are macro-exposed,” he says.

To determine the goods to which the prices apply, the TRUMP administration is based on an existing complex system called the harmonized price calendar (HTS), which organizes millions of different products sold on the American market in digital categories which correspond to different import rights. The White House document only lists a narrow group of HTS codes in the field of semiconductors who, according to them, are exempt from new prices.

GPUs, for example, are generally coded like 8473.30 or 8542.31 in the HTS system, explains Nancy Wei, analyst of the EURASIA Group consulting company. But Trump’s exemption only applies to the GPU more advanced in the last category 8542.31. It also does not cover other codes for related types of computer equipment. NVIDIA’s DGX systems, a server preconfigured with integrated GPUs designed for IA computer tasks, are coded in 8471.50, according to the company’s website, which means that it is probably not exempt from prices.

The line between these distinctions can sometimes be blurred. In 2020, for example, an importer of two NVIDIA GPU models asked the American authorities to clarify the category he considered falling. After examining the issue, customs and the protection of American borders have determined that the two GPUs belong to category 8473.30, which is not free from prices.