Trump-proposed tariffs on chip imports to impact industry profitability: analyst

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 death toll from ongoing Israeli attacks on Lebanon has risen to 634, including 91 children and 47 women, while 1,586 people have been wounded, Lebanese Health Minister Rakan Nasreddine said at a televised press briefing on Wednesday.

According to Nasreddine, the ongoing hostilities have also severely affected the health sector. He reported 22 attacks on medical facilities and services, including incidents targeting Red Cross ambulances.

The minister added that 15 health workers have been killed and 45 others wounded since the escalation began.

Meanwhile, the conflict has displaced 816,000 Lebanese, according to figures announced by Minister of Social Affairs Haneen Sayed at the same press briefing.

Sayed said that 816,000 people have registered on the ministry's relief platform as displaced. Of them, about 126,000 people are currently sheltering in 589 designated centers across the country.

Sayed added that the government is working on the ground to guide displaced families to available centers and arrange transportation to ensure they reach safe locations.

At least 17 people were injured in Israeli airstrikes targeting multiple areas in Beirut's southern suburbs, Lebanon's Health Ministry reported Wednesday.

In retaliation, Hezbollah started the "Al-Asf Al-Ma'koul" operations, launching rockets intensively toward northern Israel, according to Lebanon's National News Agency.

The group said it launched rocket salvos at multiple Israeli military sites, including the Northern Command headquarters at the Dado base, the Ein Zeitim base, and targets near Safed, Kiryat Shmona, Nahariyya, Haifa, and Lake Tiberias.

Meanwhile, the Israeli military said it began a "large-scale attack wave of strikes" on Beirut's southern suburb on Wednesday night in response to Hezbollah's rocket launches.

On March 2, Hezbollah announced the launch of rockets from Lebanon toward Israel for the first time since a ceasefire was declared on Nov 27, 2024.

Meanwhile, the Israeli army launched what it described as an "offensive military campaign" against Hezbollah, carrying out intense airstrikes on multiple Lebanese areas and border ground incursions.

Death toll from Israeli attacks in Lebanon rises to 634