U.S. Threatens 100% Tariffs on Korean and Taiwanese Chips; South Korea Pushes Back
U.S. Commerce Secretary Howard Lutnick is warning that chipmakers from South Korea and Taiwan could face up to 100% tariffs if they don’t ramp up manufacturing in the United States. The message: build more factories on American soil—or pay the price.
Lutnick made the comments during a press event at a new Micron plant in Syracuse, New York, saying the Trump administration wants stronger foreign investment in U.S. chip production. He specifically pointed to memory chip giants from Asia—without naming names—suggesting they’re not doing enough to support America’s semiconductor ambitions.
President Lee: Tariffs Will Just Raise Prices for Americans
South Korea’s president, Lee Jae Myung, didn’t waste time responding. In a press conference this week, Lee downplayed the tariff threat and made a practical point: if the U.S. puts steep import taxes on chips, Americans will likely be the ones footing the bill.
South Korean and Taiwanese companies dominate the global chip market, with up to 90% market share in key segments like memory and contract manufacturing. Lee said a 100% tariff would “most likely be passed on to U.S. prices,” since there are few real alternatives.
In short: if the U.S. wants chips, it’s going to need to buy them from the companies that actually make them. And adding a massive tax on top won’t make them any cheaper.
Chips Drive Record Trade — and Tensions
South Korea’s chip exports hit a record high in 2025, reaching $173.4 billion on the back of AI demand. About 8% of those chips went to the U.S., while China remains South Korea’s top customer.
Major players like Samsung, SK Hynix, and TSMC are already investing billions in global manufacturing—including U.S. sites—but they’ve also made it clear that building advanced fabs takes years, not months.
Lee also reminded reporters that South Korea already has trade protections in place to ensure its companies aren’t treated unfairly compared to Taiwanese firms. The message was clear: South Korea isn’t going to be strong-armed into rushed decisions.
Bottom Line
Lutnick’s comments reflect growing pressure from Washington to localize chip production—especially with national security and supply chain worries still fresh. But for many observers, the tough talk comes off as more political theater than practical policy.
President Lee, meanwhile, chose a quieter strategy: let the numbers speak. With exports booming and global demand rising, South Korea isn’t exactly negotiating from a weak position.
Whether the Trump administration’s tariff threats are real or rhetorical remains to be seen. But one thing is clear: trying to tax your way into a stronger chip supply chain might not be the smartest move—especially when your key suppliers know exactly how much leverage they have.
