Trump isn’t exactly your textbook example of a calm, rational statesman. He’s the kind of guy who’d rather throw a punch than open a dialogue—and let’s be honest, sometimes that’s exactly what’s needed. In the world of politics, where weakness is often exploited, Trump’s bullish attitude has a strange sort of appeal to the many millions of Republican voters.
Historically, he’s been a pro-business figure. That’s a good thing—economies flourish when businesses thrive, especially small-to-medium enterprises (the backbone of any real economy). His vocal support for domestic manufacturing is, on the surface, a commendable stance. Bringing manufacturing back home means stronger national security, less reliance on fragile overseas supply chains, better protection of intellectual property, and, not to be overlooked, more jobs for working-class Americans.
But here’s where the wheels fall off.
The sweeping global tariffs introduced during Trump’s trade war were about as well thought out as trying to reboot a server by throwing it out the window. Slapping tariffs on everything from steel to semiconductors, across practically every border, isn’t strategic policy—it’s economic self-sabotage dressed up in red, white, and blue.
In theory, tariffs are meant to protect domestic industries and punish foreign competitors. In practice, especially in highly globalised and technically complex industries like electronics, they just make everything more expensive and inefficient. The modern electronics supply chain is a marvel of international cooperation (whether you like it or not). A single microcontroller might be designed in the US, manufactured in Taiwan, packaged in Malaysia, and tested in Germany. Then it gets shipped back across the world to go inside a thermostat made in Mexico for sale in Ohio.
Trump’s tariffs pretend that you can just slap a tax on this chain and magically reroute it all back to Detroit. That’s like duct taping a cracked PCB and expecting the fault to disappear. The reality is, the moment those tariffs went into effect, the electronics industry didn’t jump to attention and start building fabs in Kansas. Instead, costs rose, timelines slipped, and suppliers started looking for alternate customers.
And it didn’t stop there. Unsurprisingly, other countries didn’t just sit back and smile. China—the electronics supply chain's heavyweight champion—retaliated with its own tariffs and restrictions. Notably, they’ve tightened exports of rare earth elements and materials essential to chip fabrication.
Meanwhile, countries around the world started hedging their bets. Some slashed imports of US goods, others curbed tourism, and quite a few began dumping US treasury bonds—subtly signaling that maybe the global economy doesn’t need to lean so heavily on Uncle Sam anymore.
Trump may have meant well. Supporting American manufacturing and jobs is a noble goal. But his tariff war was anything but. The intent was clear. The execution? Clumsy, destructive, and completely blind to the intricacies of the modern world economy.
In engineering, we don’t get points for trying. You either build a system that works or you don’t. And this system? It failed hard.
Recently, the China Semiconductor Industry Association has revealed the country's new chip-origin rules, which will affect the import of integrated circuits from the United States. According to the rules, the origin of a chip will be determined by the location of the wafer fabrication, regardless of whether the chip is packaged or not. This means that chips produced in U.S.-based foundries will face higher import duties in China.
The report also highlights the number of foundries and IDMs operating in the U.S. Currently, there are four foundry companies with U.S.-based facilities: TSMC, GlobalFoundries, Tower Semiconductor, and X-Fab. Additionally, there are seven IDMs with U.S.-based fabs: Intel, Texas Instruments, ADI, Micron, NXP, Infineon, Samsung, and IBM. Among these companies, Texas Instruments, Intel Infineon, and Samsung lead the IDM pack with their U.S.-based facilities, while GlobalFoundries and TMC are the top foundries with three and two U.S.-based facilities respectively.
If U.S. chipmakers thought they could dodge China’s latest import rules by playing the old shell game—fabricating wafers in the States and finishing assembly in Asia—they’re in for a rude awakening. China’s new rules draw a hard line: origin is now all about wafer fabrication. It doesn’t matter if you gold-plate it and wrap it in silk after the fact—if the wafer came out of a U.S. fab, it’s going to cost more to sell in China.
That’s a problem. A big one.
Because China isn’t just another customer—it’s one of the largest consumers of U.S.-designed and -manufactured semiconductors on the planet. From server CPUs and memory chips to mixed-signal ICs and high-end FPGAs, American firms have long relied on the Chinese market to drive volume and justify the obscene costs of running advanced fabs. This move from China doesn’t just squeeze a few companies—it pressures the entire U.S. semiconductor ecosystem. Design houses, foundries, EDA tool providers, even the equipment suppliers—they’re all about to feel the pinch.
Here’s the kicker: unlike Trump’s slapdash tariffs—which seemed to be drawn up on a napkin during lunch—China has been playing the long game. For over a decade, they’ve been quietly (and sometimes not-so-quietly) building a self-sufficient semiconductor pipeline. Sure, early efforts were clunky, but that was then.
Now? China is frighteningly competent.
We’re at a point where you can design, fabricate, and assemble an entire embedded system—microcontroller, flash memory, power management, even the compiler toolchain—using entirely Chinese-origin components. Are they as cutting-edge as the latest from Intel or TSMC? Not quite. But for 80% of applications that don’t need bleeding-edge tech? Good enough. And getting better by the day.
This is not a country scrambling to survive a trade war. It’s a country has been prepared for one for a decade—and is executing a contingency plan while the U.S. is still arguing over how to divvy up CHIPS Act funding.
However, it only gets worse for Trump. In China, the government doesn’t answer to voters every four years, meaning that the CCP doesn’t have to justify a sluggish economy to suburban swing voters in Ohio. They can take the heat and wait it out. Meanwhile, back in the U.S., any administration that tries to play economic hardball—especially one led by Trump—has to answer to the consequences in the next election cycle. And let’s face it, telling Americans they’re paying 40% more for consumer electronics because of a tariff strategy that’s failing isn’t exactly a winning campaign slogan.
So, what does this all mean?
It means U.S. suppliers are caught in a no-man’s-land of their own making. They built their business models on global demand, cheap overseas assembly, and frictionless trade. That era is over. China is calling their bluff with strategic policy—not tweets—and showing the world what long-term industrial planning looks like.
If the U.S. doesn't start treating this like the existential threat it is—not just to chipmakers, but to national competitiveness—we're going to wake up one day and realize we lost the semiconductor war not because we couldn't build fabs, but because we couldn't think past a four-year election cycle.
