US considers broader chip tariffs on consumer electronics and servers

The administration is exploring a second round of semiconductor tariffs that would also cover finished products like laptops, consoles, and servers. Commerce Secretary Howard Lutnick favors a quota system that ties duty-free chip imports to each company's pledged U.S. production. Exemptions granted in January for data centers and other categories may not be renewed.

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The proposed quota structure would tie duty-free chip imports to each company's pledged U.S. production, following the precedent set in Taiwan's January agreement, which allows zero tariffs on chips up to 2.5 times a firm's current American manufacturing capacity during construction, tightening to 1.5 times once plants are operational. TSMC's $265 billion Arizona commitment remains the largest foreign direct investment in U.S. history, yet would still leave roughly 70% of its most advanced capacity outside the country, while Taiwan supplies over 90% of leading-edge chips globally.

Industry representatives have argued that quotas keyed to domestic capacity cannot match the volumes hyperscalers are purchasing during the current AI spending surge. The January proclamation's exemption categories—covering data centers, R&D, startups, and consumer devices—are now