# Trump's NEW Tariffs Will Make Millionaires in 2025 (Here's How) Source: https://www.youtube.com/watch?v=zROOH2AdfVM Recap page: https://rapidrecap.app/video/zROOH2AdfVM Generated: 2025-07-14T01:16:27.01+00:00 --- ## Quick Overview President Trump's recently announced tariffs on copper (50%) and other countries like Japan and South Korea (25%) are primarily negotiating tactics, unlikely to remain permanent due to their inflationary impact and the impracticality of relocating complex industries like copper mining and semiconductor manufacturing. Instead, the updated "Big Beautiful Bill" offers significant, uncapped tax credits and direct cash payments for chipmakers expanding US manufacturing, creating a substantial upside for American semiconductor companies like Applied Materials and Micron Technology, and even Taiwan Semiconductor Manufacturing Company (TSMC) which is investing heavily in the US. **Key Points:** - President Trump announced a 50% tariff on imported copper, causing copper prices to reach an all-time high. - Additional reciprocal tariffs of 25% were proposed for Japan and South Korea, among other countries. - These tariffs are primarily negotiating tactics and are unlikely to be fully implemented or sustained long-term due to economic impracticalities and inflationary pressures. - The updated "Big Beautiful Bill" significantly increases tax credits for semiconductor firms to 35% for expanding US manufacturing, with these credits being uncapped and payable as direct cash. - Major chipmakers like Intel, TSMC, and Micron have committed over $100 billion each to US investments, positioning them to receive substantial government rebates. - Applied Materials, Micron Technology, and TSMC are identified as key beneficiaries, with Micron being the only major American company in the high-bandwidth memory market. - TSMC reported a 40% year-over-year revenue increase for the first half of 2025, indicating strong growth in the AI chip market despite tariff threats. ![Screenshot at 1:38: A table showing various countries and their proposed new tariff rates, highlighting Japan and South Korea at 25%.](https://ss.rapidrecap.app/screens/zROOH2AdfVM/00-01-38.png) **Context:** President Trump's administration has initiated a new phase of trade policy, threatening significant tariffs on key imports like copper and goods from countries such as Japan and South Korea. This move is framed as an effort to bolster domestic production and reduce reliance on foreign supply chains, particularly in critical sectors like semiconductors. The video analyzes these tariff announcements in conjunction with the recently updated "Big Beautiful Bill," which aims to incentivize US manufacturing through tax credits, to determine the true economic implications and identify potential investment opportunities in the semiconductor industry. ## Detailed Analysis President Trump's administration has announced new tariffs, including a 50% levy on imported copper and reciprocal tariffs ranging from 25% to 40% on 14 countries, notably 25% on Japan and South Korea. These tariffs aim to boost domestic copper mining and semiconductor manufacturing, reducing reliance on foreign supply chains. However, the video argues these are negotiating tactics rather than long-term economic policy, as industries like copper mining have extremely long development times (e.g., 29 years in the US from discovery to production), making rapid relocation impossible. Passing these costs to consumers would also lead to inflation, which the administration aims to avoid. The "Big Beautiful Bill," recently passed by the Senate, significantly increases tax credits for semiconductor firms from 25% to 35% for expanding advanced manufacturing in the US by 2026. These credits are uncapped and can be received as direct cash payments, offering a massive incentive. Companies like Intel, TSMC, and Micron have already committed over $100 billion each to US investments, potentially qualifying for tens of billions in rebates. This policy, combined with the likely reversal or reduction of the tariffs, creates a substantial upside for US-based semiconductor companies and those investing heavily in US manufacturing. Applied Materials, a key supplier of chip processing tools, is undervalued compared to peers and is crucial for the industry's growth. Micron Technology, an American company, is poised to benefit from increased demand for high-bandwidth memory driven by AI applications, and its significant US investments qualify it for substantial tax credits. TSMC, despite being Taiwanese, is also investing heavily in the US and is undervalued, showing strong revenue growth in the AI chip market. ### Trump's New Tariffs - President Trump announced a 50% tariff on imported copper, which sent copper prices to an all-time high - The US is the world's fifth-biggest copper producer but still imports 40% of its consumed copper - Trump also sent letters detailing reciprocal tariffs on 14 countries, including 25% on Japan and South Korea, 32% on Indonesia, 36% on Cambodia and Thailand, 30% on South Africa and Bosnia/Herzegovina, 35% on Bangladesh and Serbia, and 40% on Laos and Myanmar. ### Impact on Semiconductor Industry - Copper is heavily used across the entire semiconductor industry, including chips, manufacturing machines, networks, and cooling systems - Japan and South Korea supply specialized materials, components, and equipment for the semiconductor industry, including parts for photolithography machines, raw materials for silicon wafers, and camera modules/sensors - Korean companies like Samsung and SK Hynix produce over half of the world's DRAM and flash memory. ### Tariffs as Negotiating Tactics - Trump's extreme tariff announcements are negotiating tactics, not US economic policy, as industries are too difficult to relocate - It takes an average of 29 years for a copper mine in the US to go from discovery to production, meaning new supply wouldn't hit the market until 2054 - Higher copper and chip prices due to tariffs would lead to inflation, which the administration cannot support if it wants lower interest rates - Therefore, tariffs on copper, Japan, and South Korea are expected to be lowered, delayed, or removed entirely. ### The "Big Beautiful Bill" - The latest version of Trump's "Big Beautiful Bill," passed by the Senate, increases tax credits for semiconductor firms from 25% to 35% for expanding advanced manufacturing in the US by the end of 2026 - These tax credits are uncapped, meaning there's no maximum dollar amount a company can claim - Companies can also make a "direct-pay election" to receive the credit as an upfront cash payment from the Treasury instead of a tax reduction - This means the US government is giving chip companies a 35% cash rebate on their US chip production investments without limits. ### Top Stock Picks - Applied Materials (AMAT) is a key beneficiary, as it makes fundamental chip processing tools like epitaxial reactors and chemical mechanical polishers (CMPs) - AMAT trades at a 21.1x forward P/E, much lower than peers like KLA (29.9x) and Lam Research (25.4x), and cheaper than the industry average of 32.1x - Micron Technology (MU) makes memory for the entire computing industry, including HBM3E, DDR5, and NVMe SSDs, and is expected to benefit from the global high-bandwidth memory market's 25.4% CAGR through 2033 - MU trades at a 12.3x forward P/E, much cheaper than peers like Advanced Micro Devices (63x) and Analog Devices (45.6x), and cheaper than the industry average of 32.1x - Taiwan Semiconductor Manufacturing Company (TSMC) is a pure-play foundry that makes around 90% of all advanced chips globally, including for Nvidia and Apple - TSMC's revenue increased by 40% year-over-year in Q1 and Q2 2025 combined, and its stock is undervalued by 25% based on discounted cash flow models, trading at an 18x forward P/E compared to a peer average of 42.6x.