Trump’s AI Truce: White House Moves to Shield Big Tech from Chip Tariffs as Data Center Arms Race Intensifies

The Trump administration is preparing a high-stakes compromise that could reshape the economics of artificial intelligence in the United States: tariff relief for Big Tech — but only if America gets more chip factories in return.

According to people familiar with the discussions, the Commerce Department plans to spare companies like Amazon, Google, and Microsoft from upcoming semiconductor tariffs, even as President Donald Trump presses ahead with a broader push to tax chip imports and force manufacturing back onto US soil.

At the center of the plan sits one company: Taiwan Semiconductor Manufacturing Company (TSMC) — the world’s most important chipmaker and the backbone of the AI revolution.

The proposed scheme would allow US hyperscalers — the tech titans racing to build massive AI data centers — to import chips tariff-free, despite looming duties on semiconductors.

But there’s a catch.

Those exemptions would be earned, not granted, and they would be tied directly to how much TSMC invests in building chip plants inside the United States.

TSMC has already pledged a staggering $165 billion to expand US production, including its high-profile manufacturing hub in Phoenix, Arizona. Under the plan, the more capacity TSMC commits to US soil, the more tariff exemptions it can pass along to its biggest American customers.

In effect, the White House is using tariffs as leverage — not to punish AI builders, but to pressure the world’s top chipmaker to relocate more of its most advanced production to America.

President Trump has repeatedly threatened sweeping tariffs on semiconductors, arguing they are essential to national security and economic independence. In January, the White House warned of “significant duties” on chip imports as part of a broader national security probe.

But officials have stopped short of slapping blanket tariffs on chips from Taiwan — a move that would send shockwaves through the global AI supply chain and potentially stall America’s AI expansion.

Instead, the administration is threading a narrow needle: tariffs for leverage, exemptions for compliance.

An administration official briefed on the talks stressed that the plan is still evolving and has not yet been signed by the president.

“We’re going to be monitoring this like hawks,” the official said, warning that the program must not turn into “a giveaway to TSMC” that undermines the tariff strategy.

Under the outline released by the Commerce Department, Taiwanese companies that build semiconductor plants in the US would gain generous import allowances during construction:

TSMC would then be able to allocate those exemptions to its US clients, effectively shielding Amazon, Google, Microsoft, and other AI heavyweights from higher chip costs.

The scale of the carve-outs would depend on how much US capacity TSMC believes it can realistically bring online in coming years — a number still under negotiation.

The tariff plan is closely linked to a broader US-Taiwan trade agreement, under which Washington agreed to cut tariffs on Taiwanese imports to 15% in exchange for $250 billion in US semiconductor investment.

Companies that meet those investment thresholds would be exempt from the next round of chip tariffs — at least in proportion to their US footprint.

For the White House, it’s a dual victory: attracting foreign capital while maintaining political pressure to reshore manufacturing.

For Big Tech, it could mean the difference between accelerating AI deployment and watching costs spiral out of control.

The urgency behind the carve-outs is simple: AI infrastructure is devouring chips at an unprecedented rate.

America’s largest tech firms are spending tens of billions of dollars building data centers packed with advanced processors — most of them designed by Nvidia and fabricated by TSMC in Taiwan.

Any disruption to that flow would risk slowing the US’s AI momentum at a moment when Washington views technological leadership as a strategic priority.

That’s why, despite tough rhetoric, the administration has carefully avoided tariffs that would directly hit chips imported for domestic AI projects.

So far, only a narrow category of chips has been hit by new tariffs.

In January, the Trump administration imposed 25% duties on chips imported into the US and then re-exported to China — primarily affecting AMD and Nvidia. Those tariffs are tied to a deal allowing Nvidia to ship its H200 AI chips to China in exchange for the US government taking a 25% cut of sales.

But the White House has made clear that this is just phase one.

A second phase of the national security investigation could bring broader semiconductor tariffs, potentially softened by rebate programs for companies that invest in US production.

The plan reveals the administration’s central dilemma: how to punish dependence on foreign chips without sabotaging America’s AI ambitions.

If finalized, the exemption scheme would give Big Tech breathing room, keep data centers humming, and push TSMC deeper into the US manufacturing ecosystem — all while allowing Trump to claim progress on reshoring critical technology.

Whether the balance holds — or collapses under political and economic pressure — may determine how fast, and how far, America’s AI boom can run.