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

The tech industry fears that President Donald Trump's planned semiconductor tariffs could 'doom' US AI innovation, with the Computer and Communications Industry Association estimating $90 billion in annual GDP losses and 20 percent of data center projects through 2030 delayed or canceled. Politico reported that the tariffs, expected within weeks or months, might expand to cover products made with chips, including gaming consoles and data center servers, potentially driving data center development overseas.

Donald Trump may be preparing to announce sweeping new semiconductor tariffs at the absolute worst time, the tech industry fears. On Thursday, Politico reported https://www.politico.com/news/2026/08/27/data-centers-chips-tariffs-threat-01050957 that a wide range of new semiconductor tariffs, which the tech industry expects will “doom” artificial intelligence innovation in the US, could be imposed in the coming “weeks or months.” About eight people familiar with the Trump administration’s plans were granted anonymity to discuss how the tariffs might work. They suggested that the framework for tariffs may change as it becomes finalized, but one approach under consideration could “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 gaming consoles or the servers that fill data centers.” That scenario is the tech industry’s nightmare. Since Trump took office , trade groups have warned https://arstechnica.com/tech-policy/2025/04/trumps-tariffs-could-cost-semiconductor-industry-1-billion-industry-fears/ that imposing tariffs on both semiconductors and the many downstream products that use semiconductors—potentially even taxing used or refurbished products that contain chips—would be ruinous for the economy. Most absurdly, given the priorities of Trump’s AI Action Plan https://arstechnica.com/ai/2025/07/white-house-unveils-sweeping-plan-to-win-global-ai-race-through-deregulation/ , that tariff approach would cost the US about $90 billion annually in GDP losses and cause about 20 percent of data center projects planned through 2030 to be delayed or canceled, the Computer and Communications Industry Association CCIA estimated https://ccianet.org/articles/applying-semiconductor-tariffs-to-data-centers-would-cost-the-u-s-90-billion-a-year/ in June. The tariffs could even drive more data center development outside the US, the CCIA warned, which seems counterproductive, since Trump is imposing them in order to force more development into the US. Beyond disrupting the momentum of data centers, the tariffs could have wide-ranging ripple effects if certain products aren’t exempted, the CCIA said in a May letter https://ccianet.org/library/joint-association-letter-on-section-232-semiconductor-tariffs/ to Treasury Secretary Scott Bessent, which was cosigned by about 20 trade groups.