Introduction to Tariffs on Computer Chips and Semiconductors
Donald Trump has announced 100% tariffs on computer chips and semiconductors outside the USA. This step threatens to increase the costs of electronics that have been produced outside the USA, covering everything from television devices and video game consoles to kitchen appliances and cars. No date was set for when these tariffs could come into force.
Impact on Global Trading Partners
A previously announced increase in collective bargaining prices for a number of global trading partners, from 10% to over 40%, steps into force today. This move is expected to have significant implications for the global economy, particularly for countries that rely heavily on exports to the USA.
Apple’s Investment in the US
The announcement of tech tariffs came as Apple’s managing director, Tim Cook, announced that his company would invest an additional $100 billion in US production. Soon, all smartwatch and iPhone glass around the world will be produced in Kentucky, according to Mr. Cook. This is seen as an important step towards the ultimate goal of ensuring that iPhones are also manufactured in America.
Trump’s Tariffs Hit India Hard
Mr. Trump previously criticized Mr. Cook and Apple after the company tried to avoid his tariffs by moving iPhone production from China to India. The president said he had a "little problem" with Apple and told Mr. Cook, "I don’t want you to build in India." India itself felt Mr. Trump’s anger when he granted an executive regulation with an additional tariff of 25% for the continued purchase of Russian oil.
India’s Response
In New Delhi, hours after the announcement, Narendra Modi, the Indian Prime Minister, said, "I have to pay a high price for it, but I’m ready." This response indicates that India is prepared to face the challenges posed by the tariffs and will take necessary measures to mitigate their impact.
Potential Meeting with Putin
Mr. Trump said reporters in the White House that he could "hit" China with more tariffs. The two powers were in negotiations to extend a break due to the run next week. Additionally, there is a possibility that Mr. Trump could meet Putin next week, which could have significant implications for global politics.
Apple’s Expansion in the US
In the meantime, Apple is planning to hire 20,000 people in the USA to support its additional production in the country. The company will invest $600 billion over four years, with the "vast majority" of these jobs concentrated on a new end-to-end-silica production line, research and development, software development, and artificial intelligence.
Market Response
Apple’s investment in the United States led to almost 6% increase in the company’s share price on Wednesday. The increase could reflect the relief of investors that Mr. Cook is expanding "an olive branch" to Mr. Trump. This move is seen as a positive development for the company and the US economy.
