Tariffs are a cost on American companies and consumers, and could make or break the United States' ability to compete with artificial intelligence.
Congress does not need to approve tariffs with existing law:
On the campaign trail, candidate Trump was a vigorous advocate of increased general tariffs ranging from 10 percent to several hundred percentage points or more. While some assume approval from Congress might be required for any tariff increases, this view is misguided; existing law, in fact, enables swift presidential action on tariffs.
This matters because the USA relies so heavily on imports for hardware and semiconductors:
In a September 2024 report, UBS, an investment banker, predicted both tech hardware and semiconductors to be among the top four sectors that would be hardest hit by a general tariff. Their analysis is spot on. Many of the hardware components that make AI and digital tech possible rely on imported materials not found or manufactured in the United States.
Perhaps Elon will be able to inspire the necessary policy adjustments to prevent a tariff-induced hit to the nascent AI industry.