08/08/2025

BIZ & FINANCE FRIDAY | AUG 8, 2025

READ OUR

HERE

16

Malaysian Paper

/thesun

US to impose 100% tariff on imported chips

Apple to hike investment in US to US$600 billion WASHINGTON: Apple will invest an additional US$100 billion (RM423 billion) in the United States, taking its total pledge to US$600 billion over the next four years, US President Donald Trump said on Wednesday. Trump announced the increased commitment at the White House alongside the tech giant’s CEO Tim Cook, calling it “the largest investment Apple has made in America”. “Apple will massively increase spending on its domestic supply chain,” Trump added, highlighting a new production facility for the glass used to make iPhone screens in Kentucky. In February, Apple said it would spend more than US$500 billion in the United States and hire 20,000 people, with Trump quickly taking credit for the decision. It builds on plans announced in 2021, when the company founded by Steve Jobs said it would invest US$430 billion in the country and add 20,000 jobs. “This year alone, American manufacturers are on track to make 19 billion chips for Apple in 24 factories across 12 different states,” Cook said in the Oval Office. Trump, who has pushed US companies to shift manufacturing home by slapping tariffs on trading partners, claimed that his administration was to thank for the investment. “This is a significant step toward the ultimate goal of ... ensuring that iPhones sold in the United States of America also are made in America,”Trump said. Cook later clarified that, while many iPhone components will be manufactured in the United States, the complete assembly of iPhones will still be conducted overseas. – AFP TOKYO: US tariffs prompted Japanese auto giant Toyota yesterday to cut its annual net profit forecast by 14%. The world’s largest automaker by vehicle sales now expects a net profit of ¥2.66 trillion (RM76 billion), down from ¥3.1 trillion previously forecasted. “Due to the impact of US tariffs and other factors, actual results showed decreased operating income, and the forecast has been revised downward,” the firm said in a statement. Its shares fell by as much as 2.4% in Tokyo afternoon trade before recovering off lows. The Trump administration in April imposed a 25% levy on Japanese cars imported into the US, dealing a hefty blow to Japan and its crucial auto sector. Although Tokyo and Washington announced a trade deal in July, lowering that rate to 15% and providing a degree of relief for the industry, it’s not yet clear when it will take effect. There is also confusion over whether the car tariff – as well as other “reciprocal” levies – will be capped at 15%, or if these would come on top of those in place before Trump’s trade blitz. The auto industry had a pre-existing 2.5% tariff, meaning the levy currently stands at 27.5%. Toyota’s revenues in the first quarter were up 3.5%, but net income plunged by 36.9%. – AFP American levies prompt Toyota profit warning

o Trump says duties to exclude firms building in America

WASHINGTON: President Donald Trump said the United States will impose a tariff of about 100% on imports of semiconductors but offered up a big exemption – it will not apply to companies that are manufacturing in the US or have committed to do so. The move is part of Trump’s efforts to bring manufacturing back to the United States, and his remarks on Wednesday were made in tandem with an announcement that Apple would be investing an additional US$100 billion (RM423 billion) in its home market. For companies like Apple, which have committed to build in the United States, “there will be no charge”, he told reporters in the Oval Office. He warned, however, that companies should not try to wrangle out of pledges to build US factories. “If, for some reason, you say you’re building and you don’t build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that’s a guarantee,” Trump added. The comments were, however, not a formal tariff announcement, and much remains unclear about how companies and countries around the world will be impacted. Trump’s mention of the proposed 100% rate for chips came in just ahead of US levies of 10% to 50% kicking in yesterday for many goods from dozens of trading partners. Rates on semiconductors and other key tech goods have been the subject of a US national security probe – the results of which are expected to be announced by mid-August. Trump’s Wednesday remarks produced an immediate flurry of reactions from concerned countries and business lobbies. South Korea’s top trade envoy said yesterday that major chipmakers Samsung Electronics and SK Hynix will not be subject to 100% tariffs, and South Korea will have the most favourable levies on semiconductors under a trade deal between Washington and Seoul. On the other end of the spectrum, the president of the Philippine semiconductor industry, Dan Lachica, said Trump’s plan would be “devastating” for his country. Taiwan’s National Development Council Minister Liu Chin-ching told reporters

An employee working at a semiconductor chips factory in the eastern Chinese city of Huai’an. – AFPPIC

produced about 12% of semiconductor chips globally, down from 40% in 1990. “There’s so much serious investment in the United States in chip production that much of the sector will be exempt,” said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics. He added that chips made by China’s SMIC or Huawei are unlikely to be exempt, but noted that chips from these companies entering the US market were mostly incorporated into devices assembled in China. “If these tariffs were applied without a component tariff, it might not make much difference,” he said. The EU has said it agreed to a single 15% tariff rate for the vast majority of EU exports, including cars, chips and pharmaceuticals. Japan has said that the US agreed not to give it a worse tariff rate than other countries on chips. Shares in Asian chipmakers with big US investment plans climbed yesterday, with TSMC and Samsung up 4.4% and 2% respectively. Silicon wafer producer GlobalWafers, which has a plant in Texas, jumped 10%. GlobalWafers said it has proactively implemented cost reduction strategies and believes it has an opportunity to maintain competitiveness. – Reuters

yesterday that Taiwanese companies have been building US plants or buying US firms with local factories as well as collaborating with US chipmakers to counter potential chip tariffs. Taiwanese chip contract manufacturer TSMC is expected to be relatively unscathed as it has US factories, so key customers such as Nvidia are unlikely to face increased tariff costs for American-made chips. Nvidia, which makes cutting-edge AI graphics processing units, also plans to invest hundreds of billions of dollars in the US. TSMC did not immediately reply to a request for comment, and an Nvidia spokesperson declined to comment. “Large, cash-rich companies that can afford to build in America will be the ones to benefit the most. It’s survival of the biggest,” said Brian Jacobsen, chief economist at investment advisory firm Annex Wealth Management. Congress created a US$52.7 billion semiconductor manufacturing and research subsidy programme in 2022. Last year, the Commerce Department under then president Joe Biden convinced all five leading-edge semiconductor firms to locate chip factories in the US as part of the programme. The department said the US last year

Modi vows no compromise on farmers’ interests NEW DELHI: Prime Minister Narendra Modi said yesterday he would not compromise on the agriculture sector, a day after US President Donald Trump announced 50% tariffs on Indian goods. “We will not compromise with the interests of our farmers, our dairy sector, our fishermen,” Modi said during a speech at a conference in New Delhi, his remarks widely seen as his first public response to the tariffs. “special bond” with Modi when he visited Washington – complimenting Modi as being a “much tougher negotiator” than he was.

Successive US administrations have seen India – the world’s most populous nation and fifth-largest economy – as a key partner, with like-minded interests in the face of powerful China. India and China have long been intense rivals competing for strategic influence across South Asia. Modi, according to Indian media but not confirmed by officials, may visit China in late August, which would be his first visit since 2018. Modi and China President Xi Jinping last met in Russia in October 2024. – AFP

“I know I will have to pay a personal price for this, but I am ready for it,” he added, without giving further details. India has also refused to allow the import of genetically modified products. Additionally, New Delhi fears that allowing the import of dairy products may upset the cultural and religious sensitivities of India’s majority Hindus, who revere cows as sacred. It seems a far cry from India’s early hopes for special tariff treatment. In February, Trump said that he found a

Washington announced the hike in levies on Wednesday, citing New Delhi’s purchasing of Russian oil, a key revenue source for Moscow’s war in Ukraine. For New Delhi, one of the main sticking points in trade negotiations has been Washington’s demand to access India’s vast agricultural and dairy market. India has remained steadfast about its labour-intensive agricultural sector, unwilling to risk angering farmers, a powerful voting bloc.