Sweeping tariffs imposed by President Donald Trump last week will impact global technology competition, with one industry expert warning that fighting a trade war could mean the United States loses the tech war.
Navin Girishankar, president of the Economic Security and Technology Department at the Center for Strategic and International Studies (CSIS), told reporters on Monday that the United States is “well into the early innings of a multifront trade war” following the White House’s “Liberation Day” tariff announcements.
Girishankar explained that the trade war will weaken the United States’ ability to compete on critical and emerging technologies – such as semiconductors, AI, and quantum.
“We’re in the midst of an accelerating tech competition, principally the U.S. and China, across these technologies. You can’t fight a trade war and then expect to win the tech war by doing that,” Girishankar said. “I think that’s the challenge that we’re facing right now.”
The Biden administration aimed to incentivize semiconductor makers to establish new manufacturing operations in the United States through the CHIPS and Science Act.
President Trump has criticized the law, instead opting to incentivize foreign chip manufacturers to come to the United States through tariff pressure.
For now, President Trump’s tariffs carve out an exemption for semiconductors. However, tariffs on steel and aluminum, along with other countries putting their own tariffs in place, are creating uncertainty and making it more expensive to make computer chips in the United States.
Girishankar noted that emerging technologies such as semiconductors are “global in nature and have very sophisticated value chains.” Therefore, he said President Trump’s tariff agenda “makes it much more complicated to establish technology advantages and to sustain them.”
“What we haven’t heard is, what will all of this do for technology competitiveness, particularly across the advanced technologies – AI, quantum, chips, clean tech, biotech – that are going to be significant in shaping U.S. long-term prosperity, shaping the structure of the economy going forward,” Girishankar said.
“I think more and more Americans are asking this question, ‘Is this short-term pain for long-term pain?’ And in effect, the administration will have to explain why that is not the case,” he said.