AI sector warns Trump's chip tariffs could harm data center growth

The tech industry is alarmed by reports that the Trump administration plans to impose sweeping semiconductor tariffs, potentially affecting products containing chips. The Computer and Communications Industry Association estimates the tariffs could cost the US $90 billion in GDP and delay 20% of planned data center projects. Trade groups argue the move would drive development overseas and hurt innovation.

The proposed tariffs would extend beyond raw semiconductors to encompass finished goods containing chips, including data center servers and consumer electronics. The Computer and Communications Industry Association, joined by roughly twenty trade groups, has projected annual GDP losses near $90 billion and warned that about one-fifth of planned data center projects through 2030 face delay or cancellation.

The administration is reportedly considering phased implementation and potential relief for foreign manufacturers that commit to US chip production, an approach favored by Commerce Secretary Howard Lutnick. Industry representatives have expressed frustration in talks, noting that tariffs could paradoxically push data center development overseas while the stated goal is attracting such investment to American soil.