Amid the AI build-out, the country is experiencing a historic surge in the cost of memory and other computer chips. This demand shock has forced electronics makers to raise their prices. Apple raised the prices of Macs and iPads by an average of 23 percent two months ago and is now planning to raise iPhone prices. Google and Samsung have done the same on their phone models. PC prices are jumping for the first time in decades.
The good news is that the Trump administration is here to help. Politico has the scoop:
The Trump administration is weighing a new round of sweeping tariffs on semiconductors, eight people familiar with discussions told POLITICO — despite warnings from tech companies that the move could doom U.S. hopes of dominating artificial intelligence.
One tariff approach under consideration would dramatically expand the number of tech products subject to the duties, hitting not just chips but potentially many of the goods made with them, such as laptops, gaming consoles or the servers that fill data centers, the people said.
That should help with consumer prices. What brilliant mind is behind this idea?
Commerce Secretary Howard Lutnick . . .
Ah, yes. Proceed:
. . . favors a structure that would tie foreign companies’ relief from the tariffs to investment in U.S. chip manufacturing to juice more domestic production, said four of the people.
So the proposed tariffs, as they so often are under this administration, will be used as a cudgel for government to funnel capital into favored pockets of the economy. Is there a word for this?
P.S. The president is also already imposing tariffs on polysilicon, a core component of semiconductors, which should help tremendously in restoring American chip manufacturing.