Now that Donald Trump has won the U.S. presidential election, the Republican focus on the technology and chip industry is shifting further to the forefront. Mike Johnson, Speaker of the U.S. House of Representatives, downplayed his earlier comments about possibly repealing the CHIPS Act, a key law that boosts the U.S. chip sector. This law, which has created an investment boost of over $400 billion, has been under fire for some time by Republicans who question its effectiveness and geopolitical impact.
The CHIPS Act was introduced in 2022 to bring chip production back to the United States and limit China’s growing influence in the semiconductor sector. The chip industry is crucial to the United States’ economic and national security.
The Republican course under Trump
Trump has been emphatic about his views on the U.S. chip industry during the election period. He criticized the CHIPS Act and expressed concerns about Taiwan’s influence, particularly through companies like TSMC, in the U.S. chip market. Trump argued that Taiwan is too dominant in technology, which affects national security. In his view, the U.S. should exert more pressure to increase domestic manufacturing capacity. There is now speculation about a possible revision of the CHIPS Act, perhaps a “CHIPS Act 2.0,” to strengthen U.S. independence in this sector further.
During the election period, Trump already threatened a 10-20% universal import tariff on goods from abroad. That would be on top of 60% for all imports from China. Business bank Evercore calculated that it would raise the average (weighted) US tariff from 2.3% in 2023 to 17%.
Impact on Europe
We also developed a European Chips Act in Europe to increase technological independence, particularly because of geopolitical tensions. If the US introduces stricter measures to discourage foreign companies from entering the US market, European chip companies operating in the US could adjust or even relocate their production.
The Dutch chip sector could be significantly affected by US policy changes. The uncertainty surrounding the possible introduction of tariffs or export restrictions could affect trade and collaborations. This would affect not only the economy but also the Netherlands’ position as an important player in the global semiconductor industry.
For now, European stock markets rose after it was announced that Trump would win the election. This is mainly because there is now clarity, as the Dutch financial newspaper FD writes.
ING economist James Knightley already sees a European recession looming; he told De Tijd. “Although the tariffs may not impact Europe until late 2025, the renewed uncertainty and fear of a trade war could push the European economy into recession at the turn of the year.”
Trump is the new president of the United States, with higher import tariffs, a stronger focus on independence, and a U-turn in chip policy.
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