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Donald Trump’s administration intends to spare companies including Amazon, Google and Microsoft from forthcoming tariffs on chips as they race to build the data centres powering the AI boom.
The commerce department is planning to provide US hyperscalers with tariff carve-outs, which would be tied to investment commitments made by Taiwan-based chip group Taiwan Semiconductor Manufacturing Company (TSMC), people familiar with the matter said.
The exemption scheme underscores President Trump’s determination to impose tariffs on chips and incentivise US domestic chipmaking, while offering some relief for the companies powering the US’s rapid AI expansion, which rely heavily on imported semiconductors.
Trump has used the threat of tariffs to push for more US manufacturing. But the administration has stopped short of applying broad tariffs on semiconductors from Taiwan, which would rock Big Tech’s AI supply chain.
In January, the White House said it intended to impose “significant” duties on chip importers. The new scheme would allow TSMC to allocate exemptions for its US customers from this next set of tariffs. The carve-outs would be tied to the scale of the Taiwan-based group’s investments in the US.
The complex plan is intended to push the world’s leading chipmaker to shift more production to the US. TSMC, which makes most of the advanced chips used for AI, has much of its manufacturing in Taiwan. But it has pledged to invest $165bn in building capacity in the US.
An administration official briefed on the plans cautioned they were in flux and had not been signed by the president.
“We’re going to be monitoring what unfolds after this is unveiled like hawks to make sure that the integrity of what we’re trying to accomplish with the tariffs and the rebates isn’t undermined and that this doesn’t end up being a giveaway to TSMC,” the official said.
The size of the potential rebate programme would be linked to the recent US-Taiwan trade agreement. The White House has agreed to slash tariffs on imports from the island to 15 per cent in exchange for a $250bn investment in the chip industry in the US.
Under the deal, Taiwanese companies including TSMC that invest in the US will be exempt from the forthcoming tariffs in proportion to their planned US capacity.
The White House said it would allow Taiwanese companies building semiconductor plants in the US to import 2.5 times the new facilities’ planned capacity tariff-free during the construction period, according to an outline of the trade deal released by the commerce department.
Taiwanese companies that have already built plants in the US will be allowed to import 1.5 times their capacity.
TSMC would be able to allocate the exemptions it earns under the trade deal to its Big Tech clients in the US, allowing them to import chips from the company tariff-free.
The size and scope of the rebates for US hyperscalers depend on the production capacity that TSMC forecasts it can reach in the US in coming years. One person familiar with the discussions said many details remained unclear.
The US commerce department and the White House did not respond to a request for comment. TSMC declined to comment.
Only a small subset of chips, which are imported into the US and then sold to China, are currently subject to the recent US national security tariffs.
In a proclamation in January, the Trump administration imposed 25 per cent tariffs on this narrow category of chips being re-exported by AMD and Nvidia.
Those tariffs are intended to enact a White House deal that would allow Nvidia to start shipping its H200 chips to China in exchange for the US government taking a 25 per cent cut of the sales.
Chips that are imported to the US to build out the country’s domestic AI infrastructure are not subject to the January levies.
But the White House warned in the proclamation that the commerce secretary had recommended “broader tariffs on semiconductors at a rate of duty that is significant” as part of a second phase of a national security probe of the sector.
That phase could be accompanied by a tariff offset programme to allow companies investing in US semiconductor production to secure lower tariffs, the proclamation said.