The global balance of power in the decades ahead hinges on the technological decisions made today. This isn’t an arms race or a space race—it’s a data race. And at this moment, the United States is dangerously close to falling behind.
Semiconductors, a truly American invention, are now the backbone, globally, of modern life—from household appliances to national defense systems. Yet despite their origins, only eight percent of the world’s chips are currently manufactured in the U.S. That means 92 percent of these critical components come from foreign factories—many in regions dominated or threatened by geopolitical rivals.
This is an unacceptable risk. The imbalance must be addressed immediately and decisively.
President Donald Trump, alongside Commerce Secretary Howard Lutnick, has made reshoring semiconductor manufacturing a top priority. Speaking at an August cabinet meeting, Lutnick stated, “[Y]ou’re going to watch semiconductors come home…you’re going to watch the whole ecosystem come home because President Donald Trump is the only president who understands the magnet to make them come home is one word: tariffs. Tariffs are going to bring semiconductors home.”
That’s the right approach. Tariffs—used strategically—can incentivize the investments required to rebuild and reinvigorate the domestic chip ecosystem. News from the administration on this front is imminent following multiple warnings from President Trump that chip import tariffs are coming. Even with the current shutdown, it has been reported that “active investigations that could lead to sectors-specific tariffs” – perhaps like the Commerce Department’s Section 232 investigation into chips – “are humming along.”
The administration has also made clear that companies investing in U.S. manufacturing capacity could be eligible for tariff exemptions. That’s the correct incentive structure: expand domestic production and earn direct economic benefits.
But the policy must go further because driving demand for U.S.-made chips needs to be part of the equation. Multiple reports point to underutilized fabs because of lack of demand. Why build or expand a fab if there’s not enough demand for the chips it will produce?
That’s why a chip-for-chip requirement is essential. Under this framework, companies that actively build and expand factories on American soil would receive credits allowing them to import chips. This ensures a stable short-term supply while forcing long-term domestic growth. Without it, corporations could continue exploiting loopholes—offering promises of U.S. investment while keeping operations abroad, continuing to import critical chips from overseas, and leaving national security exposed.
As described by a recent exclusive, “The policy’s goal is to have chip companies manufacture the same number of semiconductors in the U.S. as their customers import from overseas producers. Companies that don’t maintain a 1:1 ratio over time would have to pay a tariff.”
For too long, successive administrations enabled the erosion of America’s industrial base. Tech multinationals reaped enormous profits on the backs of foreign labor and unfair trade deals. That era is over. American enterprise must be rooted in American soil. Innovation should flourish here—not in adversarial territories.
As Lutnick emphasized in an interview with CNBC, American companies should be successful, but they must be successful in America. If tariffs are the tool that secures domestic chip production and drives demand for U.S.-made chips, then tariffs are not only justified—they’re necessary. This is not just economic policy. It is national defense.
Semiconductor sovereignty will define the power structure of the 21st century. America must lead.
Andrew Langer is President of the Institute for Liberty
Editor’s Note: The Schumer Shutdown is here. Rather than put the American people first, Chuck Schumer and the radical Democrats forced a government shutdown for healthcare for illegals. They own this.
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