Trump threatens high chip tariffs - concern in Saxony

US President Donald Trump's announcement of possible chip tariffs of 100 percent is also causing uncertainty in Saxony and its semiconductor industry. "Although it is unclear whether and in what form the announcement will be implemented, its protectionist thrust is already having a negative impact on transatlantic trade," the Ministry of Economic Affairs stated. Tariffs have the effect of foreclosing markets and inhibiting free trade, it said.

Many thousands of people work in the semiconductor industry in Dresden alone. Infineon, Bosch and Global Foundries have plants in the state capital, and TSCM is currently building a new factory. The companies were initially cautious when asked. It is still too early to talk about the consequences, said Global Foundries spokesperson Jens Drews.

USA as one of the most important markets for Saxony

The US company employs almost 3,000 people in the state capital. As a contract manufacturer, Global Foundries produces so-called wafers for various customers. They are later used in cars, cell phones and medical technology around the globe. Global Foundries already has plants in the USA, as well as sites in Singapore and Germany.

Infineon also said that it was not possible to speculate on possible semiconductor tariffs, as no details were available at this time. According to a spokesperson, the company employs more than 3,900 people in Dresden. Group-wide, eleven percent of turnover is generated in the US business.

The US president's tariff policy has been causing uncertainty for a long time. Now Trump has threatened to impose tariffs of 100 percent on chip imports into the USA - and has immediately shown how they can be circumvented. Companies would have to decide to invest in the United States in order to be exempt, as Trump said during an appearance with Apple boss Tim Cook. Trump had been holding out the prospect of chip tariffs for some time - especially for semiconductors that are not produced in the USA.

100 percent tariffs on semiconductors soon?

Frank Bösenberg, Managing Director of the microchip network Silicon Saxony, pointed out that Trump's words are only an announcement so far - details are not known. Nevertheless, the announcement speaks for a change of course in industrial policy. "It clearly shows the importance of the chip industry and the USA's efforts to relocate production to American soil wherever possible."

This also has potentially far-reaching consequences for the European semiconductor industry, "especially for regions such as Saxony, which is considered a key region in the European chip ecosystem." The extent to which local companies are dependent on the US market cannot be precisely quantified. "But the industry is highly interconnected worldwide," says Bösenberg. Almost all producers deliver globally - including to the USA.

The USA was once again Saxony's second most important export market last year. Exports to the United States rose by ten percent to almost 5.1 billion euros. The most important products shipped from Saxony to the USA were primarily cars and vehicle parts, machinery and equipment as well as so-called electrotechnical products - including semiconductors. According to the Ministry of Economic Affairs, electronic components worth 69 million euros were exported from Saxony to the USA last year.