The Trump administration was exposed to be brewing a major new regulation: considering imposing tariffs on imported electronic products based on the number of chips.

According to three sources familiar with the matter, the Trump administration is considering imposing tariffs based on the number of chips in imported electronic devices to encourage companies to bring manufacturing back to the United States. This plan, which has not been publicly reported and is subject to change, shows that the US Department of Commerce will impose taxes based on the estimated value of the chip content of the products. The US Department of Commerce did not immediately respond to requests for comment. When asked about specific details, White House spokesperson Kush Desai responded, "The United States cannot rely on foreign imports for semiconductor products that are critical to national and economic security. The Trump administration is using a precise strategy of tariffs, tax cuts, deregulation, and energy advantages to bring key manufacturing back to the United States." If implemented, this plan would mean that the Trump administration is attempting to tax a wide range of consumer goods from toothbrushes to laptops, potentially exacerbating inflation while promoting domestic manufacturing. Michael Strain, an economist at the American Enterprise Institute, stated that this move "could raise the cost of consumer goods in the face of inflation in the United States significantly higher than the Federal Reserve's 2% target and accelerating." He added that due to new tariffs on crucial components, even domestically produced goods could increase in price. President Trump has recently been using tariffs frequently to boost US manufacturing, announcing comprehensive new tariffs of 100% on brand-name drugs and 25% on heavy-duty trucks on Thursday, breaking a period of trade calm. In April, the Trump administration initiated a "301 investigation" on imported drugs and semiconductors, paving the way for tariffs under the guise of national security. The coverage, rates, and exemption clauses of the new tariffs are still unclear. Trump previously stated in August that imported semiconductors would be subject to approximately 100% tariffs but with exemptions for companies manufacturing in the US. Major chip manufacturers outside the US include TSMC and Samsung. Sources mentioned that the Department of Commerce is considering a 25% tariff on imported equipment with chip content, with a 15% rate for products from Japan and Europe, but stressed that these numbers are only preliminary. The sources added that the Department of Commerce is considering providing equivalent tariff exemptions based on investment in the US only if companies relocate half of their production capacity to the US, although the specific implementation plan is not finalized. Three sources claimed that the Department of Commerce had suggested exempting chip manufacturing tools from tariffs to avoid raising the cost of US semiconductor production and going against the goal of bringing the industry back, but the White House expressed dissatisfaction with this due to Trump's opposition to exemptions.