Semiconductor analyst Malcolm Penn has raised concerns about the short-term effects of suggested high tariffs on imported chips by U.S. President-elect Donald Trump, stressing their potential to impact consumer prices and industry profitability.
Trump has criticized the CHIPS and Science Act that the U.S. government signed into law in 2022 in a bid to revive the country's sci-tech and chip sectors by offering incentives to chipmakers and forcing them to take side. He suggested high tariffs on imported chips, instead of relying on federal incentives for domestic production of semiconductors.
In an interview with China Global Television Network (CGTN), Penn highlighted the stark contrast between federal incentives and proposed tariffs on imported chips.
"I think the thing about the CHIPS Act is it was designed to encourage manufacturers to build factories back in the United States, and that takes a long time. So you can understand why Mr. Trump doesn't like that because it will be the next president that gets the benefit of that, rather than him. Whereas tariffs are an instant effect and that will put the price up of everybody's imported components. And that would then have an immediate impact on the cost of everything that we buy and has electronics in it. And those effect take immediate effect because nobody keeps on inventory anymore. So the fact is that you put the tariff, it would be instantly happen and the prices would rise straight away," he said.
Penn highlighted the critical role of semiconductors in the cost structure of various goods, particularly in the automotive sector. He noted that a 200-percent tariff on semiconductor imports, as proposed by Trump, would triple their price, driving up car manufacturing costs by 10 to 20 percent.
"I think that the semiconductor is anything from around 10 percent to 30, 40 percent of the cost of a car, depending on whether it's conventional gasoline driven car or an EV (Electric Vehicle) car. And so it is a big part of the overall cost. Now the actual chip value in that, there is probably half that amount. But anyway, that's still a big amount. So if you suddenly add 200 percent of the cost of the chip and effectively makes the chip three times the price that it currently is, that would affect the cost of manufacture by a minimum of 10 percent, probably could be as high as 20 percent," Penn said.
Trump-proposed tariffs on chip imports to impact industry profitability: analyst
The Iranian government is focusing on public concerns and maintaining stable supplies of essential goods amid recent protests, Iranian President Masoud Pezeshkian said in a televised interview on Sunday.
In the city of Karaj, northwest of the capital Tehran, daily life has largely continued as normal. A video filmed by a local resident on Sunday shows food stores open and grocery shelves fully stocked.
"This is the block near my home, and there are some food stores here. Daily life continues here. Last night we did not see many protests in Karaj. Right now the city is very safe. This is a grocery store close to my home. All the food is available; nothing is in shortage. Here are noodles and different types of beans. Here are dairy products, cheese, and yogurt. I also checked other grocery stores and didn't see any shortages. Everything is available," said local resident Ali Reza.
Iranian officials have described recent disturbances as acts orchestrated by the "enemy," including some carried out by well-trained and armed "terrorists." The incidents have caused casualties among security personnel and civilians, as well as property damage.
The Secretary of Iran's Supreme National Security Council Ali Larijani has directed authorities to severely punish the "terrorists."
Meanwhile, Iran's police chief Ahmad-Reza Radan said on Sunday that the police had raised alert levels and arrested several leaders of the troublemakers during the operations on Saturday.
President Pezeshkian noted in the interview that the normal demands of the Iranian people are reasonable and justified, but they must realize that triggering riots and carrying out terrorist acts are the enemy's attempts to undermine the country. He urged the public to remain vigilant.
Also on Sunday, Iranian Parliament Speaker Mohammad Baqer Qalibaf warned that Tehran would regard U.S. and Israeli bases and facilities in the Middle East as "legitimate targets" if Washington takes military action against Iran. His remarks followed media reports saying U.S. President Donald Trump is "seriously considering authorizing a strike" against Iran.
Iranian state media reported that at least 109 members of Iran's security forces have been killed in clashes since the protests began 14 days ago. Meanwhile, human rights groups based outside the country said the number of protesters killed has exceeded 200, though the figure could not be independently verified.
The protests initially erupted over a sharp depreciation of the rial and sweeping subsidy reforms. Iranian authorities have blamed the unrest on foreign-linked agents and sanctions imposed by the United States.
Iranian president says government focusing on ensuring supplies amid protests
