Trump plans chip tariff exemptions for Big Tech

The Trump administration is planning chip tariff exemptions for the biggest US cloud and AI players.

Amazon, Google, and Microsoft are set to be shielded from a new round of semiconductor duties.

This goes as long as their chips are tied to new US manufacturing by Taiwan Semiconductor Manufacturing Company.

President Donald Trump has been loud about using tariffs to force domestic manufacturing. But his administration has so far avoided hammering Taiwanese chips because that would slam straight into the core of US AI infrastructure. TSMC makes most of the world’s leading edge chips, and it has already pledged $165bn to expand in the US.

There’s a broader trade framework underneath this. A recent US Taiwan deal cut tariffs on Taiwanese imports to 15 percent in exchange for $250bn of chip investment. During construction, companies can import up to 2.5 times the planned output of new US fabs without tariffs. Existing plants get 1.5 times capacity. Only a narrow slice of chips currently face duties, mostly those resold to China by firms like Nvidia and AMD. Broader tariffs could still come later.

The disruption behind the news: The administration is picking winners, and it’s doing it openly.

If you’re a hyperscaler spending tens of billions on AI data centres, Washington just told you your compute growth comes first.

If you’re not in that club, good luck.

What changes now is the cost curve for AI expansion.

Advanced chips are the bottleneck. You can read here more about the 4 AI bottlnecks. Slap a 15 percent or higher tariff on them and you either eat the margin hit or slow deployment. By carving out exemptions, the government is effectively subsidizing AI scale for a handful of firms while using TSMC as the enforcement arm. TSMC decides who gets tariff free silicon.

This also locks in the current cloud hierarchy. Amazon, Google, and Microsoft already dominate AI infrastructure. Exemptions mean they can keep adding capacity without price shocks while smaller players and on premises builders face higher input costs. That widens the gap fast.

For TSMC, this is leverage turned into policy. The company doesn’t just supply chips anymore. It’s now a gatekeeper in US trade strategy. Its $165bn US buildout isn’t about patriotism. It will secure permanent demand from the largest buyers on earth while neutralizing tariff risk.

This kills the idea that tariffs will meaningfully slow AI. Washington just admitted it can’t afford that slowdown. National security reviews will talk tough, but the moment AI growth is threatened, exemptions appear. That tells you where the real priority sits.

What to watch next?

First, watch how narrow the exemption stays.

If it’s limited to hyperscalers, startups and second tier cloud firms will feel real pain within 12 months.

Second, watch chip pricing.

Tariff free supply for some buyers and taxed supply for others creates a distorted market. Expect long term contracts and tighter allocation.

Third, watch retaliation risk.

Taiwan is being pulled deeper into US industrial planning, and that has geopolitical consequences that won’t stay abstract.

This policy makes one thing clear. The US is willing to bend its own tariff threats to keep AI scaling at any cost.