US plans to impose 100 per cent of tariffs on imported chips are a heavy blow to Southeast Asia’s chip industry and could push the region closer to China, according to observers.
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US President Donald Trump announced the duties on semiconductors and chips on Wednesday, saying that only companies that were “building in the United States” were exempt.
It is unclear just how much of a US manufacturing presence companies would need to have to qualify for tariff exemptions or reductions, or whether the policy will differentiate between the more advanced AI chips and legacy semiconductors.
Southeast Asia, led by Singapore and Malaysia, has emerged a key manufacturing hub for legacy semiconductors, integrated circuits that use older technology.
Vietnam, which has stepped up investment in semiconductor production and workforce training in recent years, is also emerging as a key player in the global supply chain.
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With the region already struggling to absorb other tariffs imposed as part of Trump’s “America first” policy, the latest US duties – as well as Washington’s policy unpredictability – could open the way for China, analysts said.