Tariff uncertainty hits European computer chip makers

Computer chip makers are bracing for a period of uncertainty following U.S. President Donald Trump's decision to impose a 100 percent tariff on non-American chips. 

While European officials are hoping their companies will be largely shielded from this move through negotiations, there are fears it could hurt the EU's efforts to become a bigger player in this critical sector.

Semiconductors are the vital organs that help make electronic devices tick. But Washington's recent announcement of a 100 percent tariff on non-U.S. computer chips has given the sector a major shock to the system. 

It's a move that David Barrett, CEO of EBC Financial Group (UK) Ltd, says could have implications for some of Europe's biggest industries. 

"Europe has a huge dependency on them for its electrical but probably more importantly its auto industry," Barrett told CGTN. "So the supply of and the guaranteed future planning of the supply of those things is integral."

Dutch firm ASML is the world's biggest chip-making equipment supplier, generating roughly $9 billion in total net sales in the first quarter of 2025. ASML still expects 2025 and 2026 to be growth years, but says tariffs have increased uncertainty.

The company says that it expects the macro environment to remain "dynamic for a while," but there are hopes that a trade deal brokered between the United States and the European Commission will provide some protection for the EU's semiconductor sector.

Under that deal, European Commission President Ursula von der Leyen and U.S. President Donald Trump agreed to a 15 percent baseline tariff for European goods, with further negotiations to follow.

"We have a clear commitment from the U.S. that our 15 percent tariff across the board tariff ceiling will also capture EU exports of cars and car parts, pharmaceuticals and semiconductors. And we look forward to that being implemented ASAP," said European Commission spokesperson Olof Gill.

In 2023 the EU accounted for less than 13 percent of the global semiconductors market. Under the Chips Act passed that same year, the bloc hopes to hit at least 20 percent by the end of the decade.

But Barrett is among those fearing that trade tensions could short-circuit these goals.

"You can't develop that 20 percent homegrown interest without the industry being able to develop on a global base to produce the products and the profitability," he said.

And it's not only European companies impacted by the tariffs. Analysts estimate the levies could cost U.S. chip makers more than £1 billion per year in lost revenue and sales.

Meanwhile the EU maintains that duties lead to lose-lose outcomes and support a policy reset with Washington. European officials and industry are hoping the on-going EU-U.S. trade negotiations will provide clarity and certainty that such complex manufacturing involves.