President Donald Trump is proposing additional tariffs on semiconductor chips as a strategy his administration says will balance trade with foreign markets.

The action begs the question: How could it affect the massive Intel plant being built in central Ohio?

What You Need To Know

• President Donald Trump is proposing additional tariffs on semiconductor chips as a strategy his administration says will balance trade with foreign markets


• A tariff is a tax on imported goods, which experts say eventually ripples down to the consumer


• By increasing the cost of offshore chips, experts say American production can charge a higher price to add to their profits and offset risk

Imposing tariffs on semiconductor chips is nothing new. Last year, the Biden Administration announced a 50% tariff on chips made in China would go into effect in 2025, but could the addition of President Trump’s proposed 25% tariffs burden the industry even more?

Ohio State University Professor of Economic Development Emeritus Ned Hill said there will be an impact.

"If there are additional tariffs that are imposed,” Hill said, “it means that the cost of integrated circuits or chips imported into the United States will go up by at least the amount of the tariff.”

A tariff is a tax on imported goods, which Hill said eventually ripples down to the consumer. 

"When we look at the history of tariffs,” Hills said, “the price gets passed largely along to the consumer. It's somewhere between 80%, 100% of the tariff price the consumer picks up."

The Intel plant being built in central Ohio will manufacture semiconductor chips, and Hill said by increasing the cost of offshore chips, American production can charge a higher price to add to their profits and offset risk. 

Intel’s recent struggles with declining revenue have also led to questions if another company would buy it with chip giants Taiwan Semiconductor Manufacturing and Broadcom both eyeing potential deals. One reportedly could split the chipmaker up. 

"Whoever takes, you know, buys those pieces of Intel integrated into their business, and Ohio will become a branch plant for the fab,” Hill said. “Now, the question then remains to, there are two questions that remain. I fully expect they'll build out the two fabs they're contracted for.” 

It’s part of why Hill remains optimistic, saying Intel‘s investment in Ohio remains a good thing.