Trump tariff on chips a long-term concern for Asia, US – Nomura lists key risks

While US President Donald Trump announced the likely imposition of 25 per cent tariffs on imported automobiles, semiconductor chips and pharmaceuticals, Nomura said that the direct impact of higher chip tariffs on Asia will be limited. “We believe the direct impact of higher chip tariffs on Asia will be limited, as there is limited scope for substitution (inadequate fab capacity in the US and concentration of advanced nodes in Asia), which gives the region some bargaining power, especially amid the price inelasticity of US demand for AI chips. The cost will mainly be borne by the US,” said Sonal Varma, Managing Director and Chief Economist (India and Asia ex-Japan), Nomura.