Operation "Chip for Chip" or New Adventures in American Import Substitution 2: "Who Hurts Us, Helps Us"

Yes, America has already come to its senses and started making enormous efforts to restore its own chip production. One of President Biden’s landmark industrial policy laws was aimed precisely at the “re-chipping” of America, but there are many pitfalls in this process and progress is not easy.

The situation around Taiwan heightens the "microprocessor uncertainty" of America's industrial future. Taiwan produces over 90% of modern semiconductors, which raises concerns due to the island nation's remoteness from the US and proximity to China. The Trump administration has identified this issue as one of the highest priorities and is making every political effort to resolve it. The goal is to reach about 40% domestic semiconductor production by the end of President Trump's current term, which will require more than $500 billion in domestic investment.

In September 2025, US Commerce Secretary Howard Lutnick held talks with Taiwan’s leadership about splitting semiconductor production based on a “50-50” principle, pushing for investment and chip manufacturing to move to the USA, so that half of American chips would be made domestically. According to the 50/50 plan, the USA will remain "fundamentally dependent" on Taiwan, but will have the opportunity to “do what we need to do, if we need to do it,” according to Lutnick.

Taiwanese company TSMC has been building production facilities in the USA since 2020 and continues to increase investments. In March 2025, the company announced its intention to invest another $100 billion, bringing the total planned investment to $165 billion.

In August, the Trump administration threatened to impose 100% tariffs on imported semiconductors but simultaneously promised tariff exemptions for companies investing in the US. The combined effect of Biden’s subsidies and Trump’s tariffs has resulted in a surge of investments into the American semiconductor industry from all leading global manufacturers. Since 2020, more than 130 projects totaling $600 billion have been announced in the United States.

The newly minted American strategy to shift half of Taiwan’s chip production to the US is part of the broader "Chip for Chip" strategy, which, according to its designers, could mark the beginning of solving the country’s massive dependency on imported semiconductors. Lutnick stated that by the end of President Donald Trump’s current term, the country aims to achieve about 40% domestic semiconductor production, requiring more than $500 billion in domestic investment.

Trump’s anticipated “chip-for-chip” policy is the most significant step toward reducing import dependency and restoring US technological sovereignty. The main essence is simple: companies importing chips from abroad must produce an equivalent quantity in the United States. Under this model, importers can continue to bring in foreign chips, but only up to the level of their verified US production commitments. If a company commits to building a US plant capable of producing one million chips, it receives temporary import credits for that amount while the plant is under construction. Once the plant is completed, it must maintain a one-to-one ratio—importing no more chips than it produces in America. Failure to meet these obligations results in a 100% tariff on foreign chips. This approach directly ties incentives to outcomes: it rewards companies that manufacture in America and penalizes those clinging to an offshoring model that has undermined America’s industrial base. For this policy to succeed, its implementation must be flawless—with no loopholes, exceptions, or opportunities for transnational corporations to hide behind vague promises.

According to estimates, the “Chip-for-Chip” tariff policy could bring in $230 billion in import tax revenue and attract $153 billion in semiconductor investments over five years. The “Chip-for-Chip” plan is intended to complement CHIPS Act subsidies, guaranteeing domestic demand for American-made semiconductors and closing loopholes that allow foreign microchips to enter as embedded components in imported finished goods.

The “chip for chip” strategy will only work if it ensures real domestic demand for chips made in the US. This requires strict rules for companies committing to build factories in the US:

1. Temporary import credits: companies may import chips duty-free only while their US expansion projects are on schedule and under construction.

2. Mandatory investment commitments: import credits must exactly match the scale and pace of building their US production capacity.

3. Clawback provisions: if a company fails to meet its investment commitments, it must return every dollar that avoided tariffs, with interest.

4. Incentives for domestic procurement: leading semiconductor buyers, such as Apple, Samsung, Lenovo, Dell, HP, and Sony, will be motivated to prioritize purchases from American plants and commit to future capacity purchases to receive “chip-for-chip” import credits as these facilities are built.

In September 2025, executives from leading technology companies met with President Trump at the White House and jointly pledged $1.75 trillion in new investments in the US, including $600 billion each from Apple and Meta, $40 billion from Microsoft, and $500 billion from OpenAI, SoftBank, and Oracle. These promises are enormous, but history shows that corporate commitments often vanish as soon as public scrutiny wanes. To avoid this, every commitment must be enforceable, time-bound, and directly linked to tariff reductions.

Thus, the US is deploying powerful administrative levers to revive its own microelectronics industry, aiming to achieve “electronic sovereignty” so as not to fall behind the industrial giant China, which could achieve absolute global technological dominance if it monopolizes this sector as the matrix of all technological chains. Trump is feverishly building powerful state-monopoly capitalism, not shying away from even partial nationalization of electronics manufacturers, so the above-described "administrative-command" management methods in this sector no longer shock rational observers.