Five technology trade associations wrote to President Trump on Friday to argue that broad tariffs on chips and robots would raise the cost of the AI buildout his administration says it wants.
The three-page letter, signed by the Computer & Communications Industry Association, the Consumer Technology Association, the Information Technology Industry Council, the Software & Information Industry Association and TechNet, concerns the administration's Section 232 investigations into imports of semiconductors, robotics and industrial machinery. It opens by commending the president's commitment to winning "the global race for artificial intelligence" and to rebuilding American manufacturing. Its argument is that broad tariffs would set those two goals against each other.
"Broad Section 232 tariffs on semiconductors, robotics, and other critical technology inputs would increase the cost of building semiconductor fabrication plants, AI data centers, advanced manufacturing facilities, and robotics production lines across the United States," the groups wrote.
The line in January's proclamation
The chips that matter most to these companies are, for now, untaxed when they go into an American data center.
In January the president imposed a 25 per cent tariff on certain advanced computing chips under Section 232, the national-security trade law. The proclamation, which the administration called Phase 1, was narrow. It covered logic chips within specific performance bands, and it exempted a list of end uses. One of them, in the words CCIA quotes from the text, was "Covered Products for use in United States data centers."
That exemption has kept the tariff off the AI buildout. It was also always provisional. The proclamation required a Commerce Department report on the data center market by 1 July, and that report has not been published, The Next Web reported in late August.
On 27 August Politico reported, citing people familiar with the talks, that the administration was weighing a second phase that would remove the data center exemption and extend duties to the servers and other products built with the chips, according to a summary of its reporting by Tech Times. A White House spokesman, Kush Desai, told Politico that "reshoring semiconductor manufacturing is a top priority for President Trump," and that unannounced tariff plans should be treated as speculation.
Friday's letter is the industry's formal response to that prospect.
What the groups are asking for
The letter does not ask for no tariffs. It asks for "targeted, evidence-based measures focused on specific products, technologies, or countries of concern" where real national-security risks exist, rather than broad duties on everything.
Its case rests on timing. Fabrication plants "typically take three to five years to construct," the groups wrote, "and years beyond that before those facilities can provide meaningful capacity." Until domestic production reaches sufficient scale, they argue, American companies will go on relying on imports.
The same applies to robots, the letter says. It lists "high-performance actuators, harmonic drives, precision sensors, advanced controllers" among the components of what it calls embodied AI that "currently lack sufficient domestic production capacity."
Two of its requests are specific. If the administration creates a tariff offset programme, under which companies that invest in US manufacturing earn some tariff-free imports, the groups want it to cover the downstream users of chips as well as the producers, since the companies making chips in the United States may not be the ones importing them. And they want used and secondhand equipment exempted, on the grounds that it does not compete with new domestic production.
The $90 billion figure
The letter cites two estimates of the cost. An analysis by the Information Technology and Innovation Foundation found that a blanket 25 per cent tariff on semiconductor imports would reduce US GDP by about $58 billion in the first year. CCIA's own research centre put the cost at about $450 billion in investment and GDP between 2026 and 2030, or roughly $90 billion a year.
CCIA's estimate is simple to follow, which makes its assumptions easy to see. Trevor Wagener, its chief economist, multiplies three numbers. The first is the share of data center spending that goes on IT equipment, put at 78 per cent from an industry market report. The second is the share of that equipment that is imported, put at 80 per cent, the midpoint of a range of 70 to 90 per cent from the World Trade Organization. The third is the tariff, 25 per cent. The product is an effective tax of 15.6 per cent on building a data center in the United States.
From there the paper estimates that about a fifth of planned data center investment from 2026 to 2030 would be cancelled, delayed past 2030 or moved abroad, with merchant developers financed by debt hit hardest. It puts the jobs at risk at 243,000.
Each step is an estimate, and, as The Next Web noted, the import share does the most work. CCIA is also a trade association whose members include companies that would pay the tariff. The paper itself models alternatives: a 10 per cent rate, or exempting servers, would cut its estimated cost by half or more. It concludes that only keeping the existing data center exemption removes that cost altogether.
The money involved is not hypothetical. American spending on data center construction reached an annual rate of $85 billion in August, according to the Census Bureau, overtaking spending on chip and electronics plants in April.
"We understand the goal of these tariffs is to increase the production of high-technology goods in the US," said Jonathan McHale, CCIA's vice president for digital trade. "It will take years to meet that demand through onshored production, and in the interim, a tariff only cripples investment, handicaps export competitiveness, and raises costs for producers and consumers alike."
The administration has not said when it will announce the second phase, or whether the data center exemption will survive it.
The letter, dated 2 October 2026 and signed by the Computer & Communications Industry Association, the Consumer Technology Association, the Information Technology Industry Council, the Software & Information Industry Association and TechNet, was read in full as published by CCIA. The quotation from Jonathan McHale is from CCIA's press release of the same day. The $90 billion estimate, its method and its assumptions are from Trevor Wagener, "Applying Semiconductor Tariffs to Data Centers Would Cost the U.S. $90 Billion a Year" (CCIA Research Center), read in full; the ITIF figure is as cited in the letter. The terms of Proclamation 11002 of 14 January 2026 and the status of the Commerce Department's data center report are as described by CCIA, The Next Web (27 August 2026) and Tech Times (28 August 2026). Politico's reporting of 27 August 2026 on a second phase, and the statement from White House spokesman Kush Desai, are as summarised by Tech Times; the Politico article itself could not be retrieved. CCIA's members include companies that would pay the tariffs. Accurate to 9pm ET on 3 October 2026.
Topics aisemiconductorstariffsdata centersrobotics
