--- title: "Trump’s Huge New Tariffs Spell Trouble for the AI Industry" description: "President-elect Donald Trump's newly-announced tariffs already seem to be causing anxiety for the AI industry." date: "2024-11-27" modified: "2024-11-27" authors: - name: "Noor Al-Sibai" job_title: "Senior Staff Writer" link: "https://futurism.com/authors/nooralsibai" url: "https://futurism.com/the-byte/trump-tariffs-ai-industry" categories: - "Artificial Intelligence" tags: - "donald trump" - "NVIDIA" - "tariffs" - "the digest" --- # Trump’s Huge New Tariffs Spell Trouble for the AI Industry ![President-elect Donald Trump's newly-announced tariffs already seem to be causing anxiety for the AI industry.]() *\Image: Brandon Bell via Getty\* ## Off the Rack President-elect Donald Trump's [newly-announced tariffs]() represent yet another headache for the [troubled AI industry](). Long a part of Trump's bid to get back into the White House, raising tariffs on Canada, China, and Mexico is now a cornerstone of the real estate mogul's bold and short-sighted economic vision that says he'll [start enacting]() on his first day back in the Oval Office. Geared towards punishing the flow of illegal drugs and undocumented immigrants, the president-elect [plans to impose 25 percent tariffs]() on goods from Mexico and Canada, and 10 percent on products from China. Instead of spurring American innovation, however, the announcement of these tariffs has [sent shockwaves through the business world]() — especially for companies like the Taiwan-based [AI chipmaker Nvidia](), which [declared last month]() that it's "building the largest \[superchip\] production facility on the planet" with the Chinese electronics firm Foxconn in Guadalajara, Mexico. Applied to any of Nvidia's [graphics processing units]() (GPUs) shipped to the US from the Mexico plant, these tariffs stand to make the chips used to run AI even more expensive — and that's when they [already cost]() tens of thousands of dollars apiece, with each new data center calling for racks upon expensive racks of them. ## Taipei Times The AI business is red-hot in hype, but it's long struggled to make money — though its execs insist that building epic new data centers will clear a path for enormous profits. Further complicating matters is that the island nation of Taiwan, which [manufactures the vast majority]() of the world's super chip, is technically exempt from the tariff proposal as it stands now. During a pre-election interview with the [anti-scientific pundit Joe Rogan](), however, Trump suggested it shouldn't be that way. "You know, Taiwan, they stole our chip business," he [told the podcaster]() at the end of October, "and they want protection." Tariffs like these are obviously meant to pressure companies into building facilities in the United States, but several of the world's biggest chipmakers either have plans for American plants in the works, or have already begun building them. Earlier this year, Nvidia supplier SK Hynix announced that it plans to invest $4 billion into building a packaging plant in rural Indiana. The Taiwan Semiconductor Manufacturing Company (TSMC), meanwhile, already has a [massive plant in Arizona]() that's nearly finished. With so much in flux during Trump's second presidential transition, it's too soon to say for sure how these proposed tariffs will hit come January 20 — and if he'll still go through with them once his business backers realize how much they'll [inflate the costs]() of [consumer goods](). **More on Trump and AI:** [*AI Bros Terrified Singularity Will Hit While Trump Is President*]() ## Author At Futurism, I've often been drawn to unpacking the narratives that underlie technological, scientific and medical progress, with a special interest in areas of conflict and ambiguity that end up setting agendas and steering the fates of both elites and the hoi polloi. I'm a committed generalist, but I often find myself returning to work involving NASA and the private space sector, the effects of AI on media and society, and the mechanics of the pharmaceutical industry, with a specific focus on the spread of GLP-1 drugs like Ozempic and Wegovy. Prior to Futurism, I worked for publications ranging from Media Matters and Truthdig to Raw Story and Bustle. I'm also the author of "Myspace Scene Queens," a 2024 title in Instar Books' acclaimed "Remember the Internet" series. My work at Futurism has been cited by outlets including the New Yorker, Slate, Nieman Lab, the Verge, the MIT Technology Review, the Sunday Times, and the Daily Beast. I grew up in North Carolina, attended the University of North Carolina at Asheville, and now live in Brooklyn, New York. In my free time, I'm an avid reader and music fan; you can probably find me at a local poetry reading, concert, underground rave, or DJ set. I'm the proud parent of an ineffable orange cat named Mee-Mow. ### Author social links [Bluesky]()