President Trump’s tariff policy can reshape the artificial intelligence (AI) landscape in the United States and globally. In the short term, these measures can weaken US competitiveness against China. But in fact, will prove advantageous to the entire american AI ecosystem over the long-term.
The policy imposes a 10% baseline tariff on all imports, with higher rates for specific countries: 34% on China, 32% on Taiwan, 25% on South Korea, 46% on Vietnam, and 24% on Japanese goods. The AI ecosystem includes these countries because they develop a significant portion of the affordable hardware components.
The new tariffs target key suppliers of technology equipment, including semiconductors, servers, and other components critical to AI infrastructure. In many ways, AI’s infrastructure represents the muscle of American growth in the sector because of the massive amounts of compute required.
A hyperscale data center is a gigantic, highly advanced facility designed to support the enormous computing, storage, and networking demands of large-scale AI services, including AI training and referencing. Imagine millions of servers working together. It is interesting to note that former US Ambassador to UAE John Rakolta, Jr. is Chairman and CEO of Walbridge, one of the leading contractors for hyperscale data centers in our nation. Tech giants such as Amazon, Microsoft, Google, and Meta typically operate these data centers.
While semiconductors were initially exempted, it's foreseeable that chips will eventually be included. I wouldn’t be surprised if we see the Trump administration prepare a separate sector-specific tariff for semiconductors, used to encourage domestic manufacturing. The AI sector’s supply chain is global and complex, with the US producing only about 11% of its chips domestically.
Initiatives as bold as the Stargate Project run the risk of experiencing delays. Stargate is the colossal artificial intelligence infrastructure project announced by President Trump, Larry Ellison, Sam Altman, and Masayoshi Son on January 21, 2025. It’s a joint venture led by OpenAI, SoftBank, Oracle, and MGX with plans to invest up to $500 billion in the United States over four years. Trump referred to the Stargate Project as “the largest AI infrastructure project in history.” Clearly, this project represents a critical strategic move to compete with China’s AI growth and capabilities.
Although complicated, President Trump’s “reciprocal” tariff announcement should be considered with several other new economic policies that he and his advisors (US Secretary of Treasury Scott Bessent and US Secretary of Commerce Howard Lutnick) are in the process of implementing:
- Spending cuts/balancing the budget (DOGE)
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Onshoring jobs in the US
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Massive Tax Cuts
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Debt Yield Reduction
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Geopolitical Negotiation Leverage
Now, we have been following the Bretton Woods mission since July 1944, when forty-four allied nations convened in New Hampshire to establish a new post-war international financial order. One goal of Bretton Woods emphasized the formation of a “dynamic world community,” where nations could thrive through open trade, avoid economic nationalism, and, of course, stop tariff wars.
It appears President Trump is distancing America from the Bretton Woods philosophy. Pundits, world leaders, and the media are clearly agitated. The shift in policy raises questions about the future of international cooperation and economic stability. As protectionist measures gain traction, many fear that the global economy could revert to a fragmented state reminiscent of the pre-Bretton Woods era, which could hinder growth and exacerbate geopolitical tensions.
But is it still America’s job to improve the lives of the global community, or is it better to help improve the economy and jobs of the people of America? Is it time for a new approach? Can American industry handle the short-term pain?
