US Commerce Secretary threatens chip tariffs, pressuring South Korea and others to build domestically

US Commerce Secretary Howard Lutnick has confirmed that the Trump administration is advancing a "Phase Two" semiconductor tariff policy. Under this framework, companies that build manufacturing facilities in the US will receive tariff relief, while those relying on foreign production must pay to enter the US market. The policy intensifies pressure on South Korean giants Samsung and SK hynix, who have committed over $41 billion to US projects, to accelerate domestic production. Meanwhile, Seoul and Washington are actively negotiating investment terms to prevent adverse impacts on Korean firms.

Lutnick semiconductor tariff announcement

• ▪US Commerce Secretary Howard Lutnick stated that companies manufacturing semiconductors in the United States will receive tariff relief, while those relying on foreign production must pay to enter the US market.
• ▪US Commerce Secretary Howard Lutnick did not disclose specific tariff rates, product lists, or an implementation timeline for the Phase Two semiconductor tariff policy during his September 2, 2026, statements.
• ▪US Commerce Secretary Howard Lutnick confirmed on September 2, 2026, that the Trump administration is pursuing a new round of semiconductor tariffs under a "Phase Two" framework.

US domestic chip production strategy

• ▪US Commerce Secretary Howard Lutnick claimed that the US share of global semiconductor production is heading toward 40% and could reach 50% by the end of the Trump administration if Intel succeeds.
• ▪Nvidia CEO Jensen Huang stated on September 2, 2026, at the G20 Innovation Ministerial that he had held no conversations regarding the forthcoming semiconductor tariffs.
• ▪US Commerce Secretary Howard Lutnick stated that tariff pressure has helped secure $1.2 trillion in US semiconductor investment commitments, including projects by TSMC and Micron.

South Korean chipmaker investment pressure

• ▪Samsung Electronics and SK hynix have committed more than $41 billion to US semiconductor projects, including Samsung's Taylor, Texas foundry and SK hynix's Lafayette, Indiana packaging facility.
• ▪US Commerce Secretary Howard Lutnick stated on September 2, 2026, that Samsung Electronics and SK hynix should recognize that they will build factories in the United States.
• ▪South Korean industry officials expressed concern that the impact of the US tariff policy remains difficult to assess because unsettled details will determine whether existing US investments qualify for relief.

Tariff exemption criteria

• ▪The US semiconductor tariff framework favors duty-free import quotas linked to a company's planned US production, mirroring a model previously used for pharmaceutical tariffs.
• ▪Under the US-Taiwan trade agreement signed in January 2026, TSMC is permitted duty-free imports of up to 2.5 times its planned US capacity during construction and 1.5 times completed capacity afterward.
• ▪The Trump administration is considering extending Phase Two semiconductor tariffs to chip-powered consumer products, including laptops, gaming consoles, and data-center servers.

South Korea-US bilateral negotiations

• ▪Under a bilateral agreement struck in 2025, South Korean chipmakers are guaranteed US tariff rates no less favorable than those offered to competitors with equal or larger chip trade volumes.
• ▪A South Korean presidential official stated on September 4, 2026, that bilateral negotiations with Washington over South Korea's plan to build its own nuclear-powered submarine have not been making progress.
• ▪South Korea and the United States are discussing semiconductor investments in the US as part of broader bilateral talks, according to a South Korean presidential official on September 4, 2026.

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