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Washington has warned Southeast Asia's semiconductor industry that it must shift production to the US or risk steep tariffs, escalating trade tensions that could hit one of the region's most critical export sectors
US Trade Representative Jamieson Greer, speaking in Kuala Lumpur on Thursday, 25 September, after meeting ministers from the Association of Southeast Asian Nations (ASEAN), said tariffs "are the solution" if negotiations fail.
"We have to have the supply chains back in the United States," Greer was quoted as saying by the South China Morning Post (SCMP).
The warning follows US President Donald Trump's threat three weeks ago that his administration would "very shortly" impose tariffs on semiconductors made outside the US, even floating a 100% levy on imported chips.
"If, for some reason, you say you're building and you don't build, then we go back and we add it up; it accumulates, and we charge you at a later date; you have to pay, and that's a guarantee," Trump said.
Southeast Asia is a key player in the global semiconductor supply chain, with Malaysia alone handling about 13% of advanced chip testing and packaging worldwide
The country is also chairing ASEAN this year and has pledged to spend USD240 billion (about RM1 billion) on US goods and investments as part of its proposed trade deal with Washington.
For now, ASEAN's largest economies are offering billions of dollars in concessions, including purchases of corn, petroleum, and aircraft, in hopes of avoiding a trade clash.
But, as per the SCMP, Greer left little doubt about Washington's stance: "If we aren't able to reach agreements, then the tariff solution is the solution".
Meanwhile, the Wall Street Journal cited White House spokesperson Kush Desai saying, "America cannot be reliant on foreign imports for the semiconductor products that are essential for our national and economic security."
