Trump's chip tariff cannot be implemented quickly: Expert

Washington, Feb. 21 (CNA) Aaron Friedberg, a politics and international affairs professor at Princeton University, said it would not be easy for the United States to rapidly implement a tariff on imported semiconductors because the cost of the policy to the country would be too high.

In an email Wednesday, Friedberg said while U.S. President Donald Trump wants to use tariffs to persuade companies to manufacture in the U.S., he did not expect the threats to be carried out quickly.

"Given that it will likely take many years to increase U.S. semiconductor manufacturing capacity, the imposition of high tariffs would drive up the costs and reduce the competitiveness of other American industries," Friedberg said.

"For that reason, I would not expect to see these threats carried out all at once or quickly," he added.

Friedberg said Trump's chip tariff threats aimed to push domestic and foreign manufacturers to boost U.S. investments.

"Whether by the threat of tariffs or perhaps more positive inducements and incentives, the U.S. will definitely be trying to encourage Taiwanese and other foreign companies to invest more in the U.S.," the Princeton professor said.

On Tuesday, Trump said he would like to impose a 25 percent tariff on semiconductors, cars and pharmaceuticals, with an official announcement expected as soon as April.

"It'll be 25 percent and higher, and it'll go very substantially higher over the course of a year," Trump told reporters at his Mar-a-Lago club.

Trump has repeatedly alleged Taiwan "stole our chip business." Joseph Wu (吳釗燮), secretary-general of Taiwan's National Security Council, said on Friday that Taiwan Semiconductor Manufacturing Co. (TSMC), the world's largest contract chipmaker was a self-made success.

TSMC is investing US$65 billion in Arizona to build three advanced fabs. In the face of Trump's tariff threats, it is widely thought that TSMC will establish more sophisticated IC assembly plants in the U.S. or even acquire a stake in Intel Corp.'s fab operations through technology transfer.

TechSpot, a U.S.-based tech website, reported on Thursday that the U.S. and many Western countries are not as efficient as Taiwan when it comes to building semiconductor fabs, saying "building semiconductor plants in the U.S. takes twice as long, costs twice as much as in Taiwan."

It added that the West has to streamline fab construction processes to catch up with the semiconductor ecosystems in Taiwan and other Asian manufacturing hubs.

TechSpot highlighted the challenges TSMC has faced in the U.S., explaining that "TSMC struggled to find skilled workers locally, a problem rarely encountered in Taiwan."

It added that "cultural differences between TSMC's Taiwanese management and American employees created unforeseen obstacles," but that "perhaps most critically, navigating local regulations proved difficult for the global chip manufacturer."

On Feb. 13, John Bolton, former National Security Advisor to Trump told CNA in an interview that imposing a tariff on chips from Taiwan would not change the reality that the U.S. is dependent on Taiwan-manufactured chips.

Bolton said the real issue is that the U.S. cannot develop cutting-edge IC capabilities overnight.