At a Republican fundraising dinner on Tuesday, former President Donald Trump took aim at President Joe Biden’s multibillion-dollar push to bring semiconductor manufacturing to the United States. Trump criticized the administration’s $6.6 billion grant to Taiwan Semiconductor Manufacturing Company (TSMC), saying he never needed to give them any money—just a warning.
“I didn’t give TSMC a single dollar,” Trump told the audience at the National Republican Congressional Committee event. “I told them—either build your factory here, or get ready to pay a huge tax. And they built.”
The remark was part of a broader rebuke of the Biden administration’s economic strategy, particularly the subsidies offered to tech companies through the CHIPS and Science Act, which aims to boost domestic chip production.
Trump Says Threats, Not Subsidies, Brought TSMC to the U.S.
TSMC, the world’s top contract chipmaker, has significantly expanded its footprint in the United States in recent years. The company is building multiple semiconductor plants in Phoenix, Arizona, and recently announced plans to invest $100 billion in five new U.S. facilities. This is in addition to a $65 billion commitment made earlier in 2024.
While the Biden administration celebrated the expansion and promised federal funding to support it, Trump insists the groundwork was laid under his presidency—without writing any checks.
“These companies are flush with cash,” Trump said Tuesday. “They don’t need government handouts. They need to know we’re serious about keeping jobs in America.”
He criticized the CHIPS Act as unnecessary and overly generous, arguing that financial muscle isn’t the problem for companies like TSMC, but rather a lack of tough policies. “They give these companies billions to build here, and many still choose not to,” he said.
TSMC’s U.S. Operations Grow Amid Controversy
Despite Trump’s skepticism, TSMC’s Arizona operations have grown significantly, with one factory already up and running and more in the pipeline. However, the expansion hasn’t been without setbacks. Initial construction delays slowed progress, and now the company faces a potential legal challenge.
According to a Reuters report, TSMC could be fined over $1 billion in connection to a U.S. investigation. The issue centers on one of its chips that allegedly ended up in a Huawei artificial intelligence processor, raising concerns over export control violations.
Even as the company moves forward with U.S. investments, the Biden administration has faced scrutiny over whether taxpayer money should go to a company potentially entangled in a legal and geopolitical storm.
Trump’s Tariff Playbook Returns to the Spotlight
Trump’s comments this week reaffirmed a familiar stance—using tariffs and trade pressure to achieve domestic policy goals. During his presidency, Trump frequently threatened steep tariffs on companies that outsourced production or declined to invest in the U.S. He revisited that tactic Tuesday, suggesting that a tax of up to 100% was enough to push TSMC into action.
This strategy isn’t new. On the campaign trail last September, Trump floated a 200% tariff on John Deere if it moved manufacturing to Mexico. And just last week, he introduced a sweeping new tariff plan affecting imports from over 180 countries, with a baseline rate of 10%.
Though semiconductor imports weren’t immediately affected, members of Trump’s circle hinted that more targeted trade actions—particularly in the tech sector—could be on the horizon.
More Chip Tariffs May Be Coming
Commerce Secretary Howard Lutnick hinted on Thursday that Trump isn’t done with the semiconductor industry just yet. Speaking on the sidelines of a policy event, Lutnick suggested that tariffs on chips might come later as part of a broader strategy to bring manufacturing back from Asia.
“Donald Trump’s going to study that industry closely,” Lutnick said. “At some point, America has to be able to defend itself. That means having a strong domestic semiconductor base.”
While Biden’s administration is focused on building that capacity through public-private investment, Trump is pushing for what he calls “economic self-defense”—using tariffs and other restrictions to rebuild domestic production.
Semiconductors Become a 2024 Battleground Issue
The escalating debate over semiconductor policy is shaping up to be a major flashpoint in the 2024 presidential race. With concerns growing over supply chain security, competition with China, and American job creation, both candidates are using the chip industry to illustrate their broader economic visions.
Trump is leaning heavily into his “America First” mantra, claiming he achieved more with pressure and threats than Biden has with billions in subsidies. Meanwhile, Biden continues to promote long-term investment in high-tech industries as the key to maintaining U.S. global leadership.
As both sides sharpen their messaging, one thing is clear: semiconductors—tiny but powerful—are at the center of a very big political fight.
