AI industry says Trump plans to tax chips in the “single dumbest way imaginable”

The Trump administration is considering broad new tariffs on semiconductors and products containing them, which the tech industry says would undermine rather than advance the goal of building AI infrastructure in the US. The concern is that taxing data center equipment and chips during a period of semiconductor shortage would raise costs for companies trying to build out AI infrastructure, while domestic chip manufacturing capacity remains years away from being ready. A trade group estimated these tariffs could cost about 90 billion dollars annually in GDP losses and delay or cancel around 20 percent of planned data center projects through 2030. Industry representatives argue that taxing chip imports now, when the US still depends on overseas semiconductor production, contradicts the stated objective of expanding American AI dominance.