Trump's new tariff plan could tax laptops to toothbrushes based on number of chips they have

The Trump administration is weighing a new tariff plan targeting foreign electronic devices based on the number of chips inside them, according to three people familiar with the discussions. The measure, not previously reported and still subject to change, would calculate duties as a percentage of the estimated value of a product’s chip content.

The Commerce Department did not immediately respond to requests for comment. But the White House confirmed the direction of policy. “America cannot be reliant on foreign imports for the semiconductor products that are essential for our national and economic security,” spokesperson Kush Desai said. “The Trump administration is implementing a nuanced, multi-faceted approach to reshoring critical manufacturing back to the United States with tariffs, tax cuts, deregulation, and energy abundance.”

If enacted, the plan could hit a vast range of consumer goods, from laptops to toothbrushes, and add to inflationary pressures. “The plan could push up the cost of consumer goods at a time when the U.S. has an inflationary problem, with inflation clearly above the Fed's target and accelerating,” said Michael Strain, economist at the American Enterprise Institute. He added that even domestically produced items would become more expensive as tariffs drive up input costs.

The idea comes amid a broader push by President Donald Trump to harden U.S. trade policy. On Thursday, he announced sweeping new import duties, including 100% tariffs on branded pharmaceuticals and 25% levies on heavy-duty trucks. In April, the administration opened probes into pharmaceutical and semiconductor imports, citing national security concerns.

Uncertainty remains over which chip-dependent products would be covered, the exact tariff rates, and possible exemptions. Trump has already pledged a 100% tariff on semiconductor imports while exempting companies producing in the U.S. or committing to do so. Taiwan Semiconductor Manufacturing Co. and Samsung Electronics remain among the biggest foreign suppliers.

One source said Commerce is considering a 25% rate for chip-related content in imported devices and 15% for electronics from Japan and the EU, though the figures are still preliminary. Officials have also explored a dollar-for-dollar exemption tied to investment in U.S. plants if a company shifts half its production to America, but the details remain uncertain.

According to the sources, Commerce initially floated exempting chipmaking tools to avoid undermining U.S. semiconductor production, but the White House pushed back, citing President Trump’s resistance to carve-outs.

(With Reuters inputs)