Everything is political. Even semiconductors.
At least it seems that way with the ongoing battle over tariffs and DEI and so much more.
Some background: I covered the political scene in Chicago in the 1980s when Jane Byrne was mayor and later with Harold Washington. The ward bosses ran the pothole repair, trash collection and snow removal and so you realized soon enough that the guys doing those jobs almost always had to be friends with the ward bosses under the guidance of the aloof aldermen. It was a good training ground for later working as a reporter covering the Maryland governor and Statehouse from the wise vantage point of Montgomery County, MD, as well as the state of Illinois and Virginia, especially around the politics of keeping the Washington Beltway traffic moving in a rapidly expanding region. So, I gradually realized, priorities for how dollars are spent on the operations of a city or state and the essential capital investments do come down to the Big Boss in charge.
The same is happening with President Trump and his stated efforts to correct trade imbalances with trading partners abroad and to onshore manufacturing jobs. Electronics components are mainly made in Asia and the president wants that changed. He won the election and has the mandate for his moves (although some in Congress argue he cannot set tariffs without Congress acting to do so), and in theory it makes sense to urge or coerce Apple and others to move electronics manufacturing to the US. However, moving jobs onshore, especially the making of semiconductors and other electronics, will require years, yes decades, of slow change. Thousands of sensors and electronics piece parts go inside today’s cars, servers and other computers. Sourcing them has been built up over decades in mainly Asian countries. Apple wants to move jobs from China where the biggest tariffs are in place to India, but lately the president has objected, saying he met with CEO Tim Cook in Qatar and told him, “I don’t want you building in India.” And that led to Apple upping US production, the president said.
The White House keeps touting trillions of dollars in commitments by major companies to move manufacturing to the US from mainly Asia, but so far it is a paper tiger. Many companies started moving years ago and have upped those commitments. Trump deserves credit for wanting to onshore to create US jobs, but the real value might be a little different. If the current tariff truce between the US and China helps put old issues on the table for discussion, it will be worth it. These older issues are concerns about Chinese companies stealing US intellectual property or the Chinese government propping up its industries in ways seen as unfair, according to international trade agreements. Whether the US can generate enough engineers and technical talent for future US fabs will remain a persistent concern.
Why aren’t more CEOs talking publicly about the tariffs, I keep asking myself? The reason seems fairly obvious: they don’t want to draw Trump’s ire on Truth Social or elsewhere and then inflame the MAGA faithful, some who work at their electronics operations and voted for Trump and are willing to go public and rant. In one case, it became obvious when I was doing an interview that a global electronics trade association was not commenting on the so-called reciprocal tariffs in early April because the association wanted to see Congress preserve the flat 21% corporate income tax rate due to expire this fall. (The House seems ready to keep it at 21%, which won applause from the IPC electronics trade group.)
There cannot be a single US company in electronics that would say anything to appear to oppose continued tax levels of 21%, which is also important even if a company opposes 30% tariffs on goods coming from China (or whatever the tariff rate will be after the 90-day US-China truce expires in mid-August). As a result, electronics companies are hoping their trade association lobbyists walk the fine line when meeting with Congressional or White House officials. They want to have time—years--to build up manufacturing in the US and still avoid tax increases. It’s a crass tradeoff and it always was this way. Some call it a form of diplomacy, ha!
The best illustration of a CEO speaking out about tariffs came recently when Walmart CEO Doug McMillon said the cost of tariffs (even at truce-lowered levels) will result in higher prices on some products for Walmart shoppers. After his comments, President Trump blasted Walmart on social media:
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump wrote in Truth Social on Saturday. “Between Walmart and China they should, as is said, ‘EAT the TARIFFS,’ and not charge valued customers ANYTHING. I’ll be watching, and so will your customers!!!”
Walmart had the temerity to respond to Trump’s rant, saying, “We’ll keep prices as low as we can for as long as we can given the reality of small retail margins.”
Other companies have threatened price increases, although the increases are already being felt by semiconductor customers based on a few reports. Microsoft has said it will raise recommended retail prices on video game consoles, while Mattel, Ford, Temu and Shein have recently announced possible price hikes connected to tariffs.
So, again, why don’t more electronics companies speak out about concerns about tariffs? Answer: Electronics CEOs are not afraid of a Trump tirade or even a MAGA barrage, but they don’t want to sacrifice the possibility of keeping a 21% corporate tax rate by ruffling any feathers over tariffs. Their mindset seems to be: keep a lid on talking about tariffs until Congress seals the deal on the 21% tax rate. As I write this, I realize there’s no way Trump and the GOP will ever remove his commitment to the 21% tax rate, even as retribution for an industry opposing his tariff policy. But members of Congress could pick up on tariff critics and do strange things to inflict tedious retribution, like not answering the calls of critics or agreeing to meet.
Yes, everything comes down to politics. It is sometimes hard to remember that axiom when a semiconductor company brags about faster throughput and capability of a new chip and the trade press gobbles up those stats for stories because, yes, competition for speeds and feeds is traditionally what has mattered to trade reporters. In the current media environment, however, it feels to me that a publication cannot afford to cover only the speeds and feeds. Everything matters to everything else in Trump World, it seems, but politics really matters.
Hamblen’s views are his own, not those of Questex. Tariffs and their impact on electronics businesses will be the subject of an upcoming poll featured in Fierce Electronics. At Sensors Converge 2025, an expert panel will discuss the topic: "Tariffs, trade wars and the CHIPS Act: Confronting uncertainty in US electronics policy." A free Expo Hall pass to Sensors Converge 2025 in Santa Clara, CA, is a available by using the code HAMBLEN at online registration.