Trump administration weighs expanded semiconductor tariffs, including data center servers

The Trump administration is considering a new round of tariffs on semiconductors, and the scope of those measures could extend beyond chips themselves to include finished goods that rely on them, such as data center servers, according to a Politico report. The discussions remain at an early stage, with officials still debating the structure, timing, and potential exemptions of any new duties.

Tariffs are paid by the importer, not the exporter, meaning U.S.-based companies that purchase foreign-made servers, networking equipment, and other chip-dependent hardware would bear the added costs. The administration is reportedly weighing a phase-in period for the new tariffs, which would give affected industries time to adjust supply chains and procurement strategies.

Commerce Secretary Howard Lutnick has emerged as a key advocate for using the tariffs as leverage to force investment in domestic semiconductor manufacturing. Under the framework being discussed, companies that commit to building or expanding chip fabrication facilities in the United States could be exempted from the duties. The approach mirrors the administration's broader goal of reshoring critical technology production, a theme that has defined its industrial policy agenda.

“Reshoring semiconductor manufacturing is a top priority for President Trump, whose policies have already secured hundreds of billions of dollars of investments in this key sector,” White House spokesperson Kush Desai said in response to the report. “The Trump administration remains focused on delivering more investments and economic relief for the American people while safeguarding our national security.”

The potential expansion of tariffs comes at a time when the data center industry is already grappling with rising costs and supply chain constraints. A June analysis by the Computer and Communications Industry Association (CCIA) estimated that broad tariffs could cost the U.S. economy approximately $90 billion in GDP losses annually and delay or cancel around 20 percent of data center projects planned through 2030. If servers are included in the tariff scope, hyperscale operators, cloud providers, and enterprise data center owners could face significant capital expenditure increases at a moment when demand for AI infrastructure and computing capacity continues to surge.

Industry observers note that the inclusion of data center servers would mark a notable escalation from previous trade actions, which largely targeted raw semiconductors and chipmaking equipment. Servers are complex assemblies with components sourced from multiple countries, making tariff design and enforcement particularly challenging. The uncertainty itself could slow procurement decisions, as operators weigh whether to accelerate purchases ahead of potential duties or delay orders in hopes of exemptions.

The administration's push to tie tariff relief to domestic investment is likely to intensify pressure on both chipmakers and downstream hardware manufacturers to expand U.S. operations. While the policy is still taking shape, the potential ripple effects across the semiconductor supply chain and the data center construction pipeline are already drawing attention from industry stakeholders and investors alike.