Trump Says US Will Charge Tariff Of About 100% On Some Semiconductor Imports

Economic

Summary:

The United States will impose a tariff of about 100% on semiconductor chips imported from countries not producing in America or planning to do so.

The United States will impose a tariff of about 100% on semiconductor chips imported from countries not producing in America or planning to do so, President Donald Trump said.

Trump told reporters in the Oval Office on Wednesday the new tariff rate would apply to "all chips and semiconductors coming into the United States," but would not apply to companies that had made a commitment to manufacture in the United States.

"So 100% tariff on all chips and semiconductors coming into the United States. But if you've made a commitment to build (in the U.S.), or if you're in the process of building (in the U.S.), as many are, there is no tariff," Trump said.

It is not clear how many chips will be covered by the tariffs.

Congress created a $52.7 billion semiconductor manufacturing and research subsidy program in 2022. The Commerce Department last year under President Joe Biden convinced all five leading-edge semiconductor firms to locate chip factories in the U.S. as part of the program.

Last year the department said the U.S. produced about 12% of semiconductor chips globally, down from 40% in 1990.

Trump added: "If, for some reason, you say you're building and you don't build, then we go back and we add it up, it accumulates, and we charge you at a later date, you have to pay, and that's a guarantee."

Source: Reuters

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Manuel

Central Bank

Economic

San Francisco Federal Reserve president Mary Daly said Wednesday that the Federal Reserve will likely need to lower rates in the coming months, noting that while tariffs will boost inflation in the near term, the job market has slowed.

"The labor market has softened. And I would see additional slowing as unwelcome, especially since we know that once the labor market stumbles, it tends to fall quickly and hard," Daly said in a speech in Alaska. "All this means that we will likely need to adjust policy in the coming months."

Daly said at the same time tariffs will boost inflation in the near term, but "likely not in a persistent way that monetary policy would need to offset."

Daly's comments come after a government report showed the US economy added just 73,000 jobs in July, while the unemployment rate moved up to 4.2% from 4.1% the month prior. At the same time, the two prior months saw downward revisions. May's job gains were revised down to 19,000 from 144,000, while June's additions were cut to just 14,000 from the 147,000 initially reported. That pulled the three-month average employment gain down to 35,000 — a figure many analysts are interpreting as a sign that hiring is stalling, even as population growth slows.

Daly noted that inflation, absent tariffs, has been gradually trending down and that with a slowing economy and ongoing "restrictive monetary policy, should continue to do so."

Daly's comments come after Fed Chair Jay Powell said last week during his press conference following the Fed's policy meeting that no decision has been made on whether to cut rates in September and that more time is needed to assess how Trump's tariffs will affect the path of inflation and the strength of the US economy.

He told reporters there is still "a long way to go" to determine exactly the impact of tariffs, and "you have to think of this as still quite early days."

Meanwhile, FOMC vice chair and New York Fed president John Williams said he still thinks the job market is in "solid" shape but added that the downward revisions in jobs created in July were unsettling.

At the same time, Fed governors Chris Waller and Michelle Bowman dissented at last week's policy meeting, preferring to cut rates by 25 basis points rather than hold rates steady. Both are more concerned about the job market than the impact of tariffs on inflation.

"We don't have perfect clarity," Daly said. "But the truth is central banks rarely have perfect clarity, and we can't wait for it to act."

Join former Fed Vice Chair Lael Brainard, along with other newsmakers and top investors, at Yahoo Finance Invest on November 12–13 in NYC as they discuss the agenda for success in 2026. Register to attend today.

Jennifer Schonberger is a veteran financial journalist covering markets, the economy, and investing. At Yahoo Finance she covers the Federal Reserve, Congress, the White House, the Treasury, the SEC, the economy, cryptocurrencies, and the intersection of Washington policy with finance.

Source: Yahoo Finance

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China–U.S. Trade War

Economic

President Trump on Wednesday signed an executive order imposing an additional 25% tariff on India over its purchases of Russian oil. The new tariff, which will come into effect in 21 days, is set to "stack" on top of an existing country-specific tariff of 25%.

In doing so, Trump is set to make good on a threat for higher tariffs on India, as he has accused the country of effectively financing the Russian war in Ukraine. "They're fueling the war machine," he charged in a CNBC interview.

India's first 25% levy takes effect Thursday, part of scores of new duties that will see importers paying between 10% to 50% as they bring in goods from nearly 200 countries around the globe. Outside of India, Switzerland is the developed nation whose goods face a whopping increase: up to 39%.

You can see the new rates Trump is set to levy in the graphic below:

Trump also said that he would soon announce tariffs on semiconductor and pharmaceutical imports, as he prepares to add more sectoral duties to his mix of tariffs. He said duties on pharma could eventually balloon as high as 250%. On Wednesday, during a White House event with Apple (AAPL) CEO Tim Cook, he suggested he would impose a tariff of 100% on "all chips and semiconductors coming into the United States."

In the past several days, Trump has unleashed a flurry of deals and trade moves leading up to his self-imposed deadline: India hit With 50% Tariffs, Trump Targets 100% Duties on Semiconductors_1

India hit With 50% Tariffs, Trump Targets 100% Duties on Semiconductors_1

Trump granted Mexico, the US's largest trading partner, a 90-day reprieve on higher tariffs.

Trump hiked tariffs on Canadian imports to 35%, though goods contained in the US-Mexico-Canada agreement are exempt, keeping this hike's impact limited so far.

The US agreed to a trade deal with South Korea. The agreement includes a 15% tariff rate on imports from the country, while the US will not be charged a tariff on its exports.

Trump imposed 50% tariffs on semi-finished copper products starting Aug. 1.

The president signed an order to end the de minimis exemption on low-value imports under $800, thereby applying tariffs from Aug. 29.

Trump signed another order to impose a total of 50% tariffs on many goods from Brazil. However, it exempts key US imports like orange juice and aircraft parts.

The US and EU agreed to a trade deal that imposes 15% tariffs on EU goods. The nations are still working on finalizing many terms of the deal.

Source: Yahoo Finance

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Manuel

Cryptocurrency

Bitcoin (BTC) is consolidating in a thin-liquidity “air gap” between $110,000 and $116,000 as the market waits for new demand to establish a firm base.

According to an Aug. 6 report by Glassnode, BTC’s price pulled back to $113,000 after setting a new all-time high above $123,000 in mid-July. This price movement left many recent buyers underwater and created a supply cluster with a cost basis above $116,000.

The lower bound of that cluster repeatedly supported rebounds until July 31, when BTC broke lower into the air gap. Historically, such low-liquidity ranges can morph into accumulation zones as buyers step in at a perceived discount.

The report compared entity-adjusted URPD snapshots from July 31 and Aug. 4 to gauge dip-buying. Bitcoin Settles Into $110k–$116k ‘air gap’ as Market Awaits Fresh Demand_1

Bitcoin Settles Into $110k–$116k ‘air gap’ as Market Awaits Fresh Demand_1

Following a rebound from around $112,000, investors acquired roughly 120,000 BTC and lifted spot prices back above $114,000, evidencing opportunistic demand.

Even so, the $110,000-$116,000 band remains light in aggregate supply. Time spent accumulating here could potentially build a platform for the next move higher.

New resistance, metrics not overheated

The rally has yet to reclaim the cost basis of holders with amounts of one week and one month old, now with a decisive resistance near $116,900. A sustained break above would signal demand regaining control, while a failure raises the risk of a deeper test of the previous all-time high range around $110,000.

According to the report, price sits in a “warm” but not overheated regime and remains above the short-term holder (STH) cost basis at $106,000. This price level is a threshold that has historically divided near-term bullish and bearish phases in Bitcoin bull markets.

STH supply in profit has slipped from 100% to 70% during the drawdown, consistent with the midline of prior bull cycles. The share of STH spent volume in profit has cooled to 45%, below neutral, implying a balanced market with neither side dominant.

ETF flows and leverage

On Aug. 5, spot Bitcoin exchange-traded funds (ETFs) in the US saw a 1,500 BTC outflow, the largest bout of ETF sell-side pressure since April 2025. Historically, these episodes have been brief, but monitoring persistence is key.

In derivatives, perpetual funding rates have slipped back below 0.1%, a neutral zone that indicates cooling speculative appetite and tempered upside conviction in the near term.

Taken together, Bitcoin appears locked in the $110,000-$116,000 corridor, accumulating supply and waiting for demand sufficient to retake $116,900 and reassert the uptrend.

Source: Cryptoslate

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Adam

Central Bank

Economic

The Bank of England's (BoE) Monetary Policy Committee (MPC) meeting on Thursday, August 7, 2025, is an important moment for the UK economy. Everyone is watching closely for the BoE's decision on interest rates and updated economic forecasts.

The current Bank Rate is 4.25%, after cuts in February and May 2025. Most analysts and market predictions expect a 0.25% cut, bringing the rate down to 4.00%. This move would show the BoE continuing to take a more supportive approach to help the UK economy adjust to current challenges including the labor market.

When it comes to the vote split, i do expect seven members to vote for a 0.25% rate cut, with one member possibly disagreeing (either wanting no change or a 0.5% cut). However, this vote split isn’t a strong indicator of future decisions, even though markets often react to it on the day.

What are the Key Concerns for the Bank of England (BoE) Moving Forward?

Labor Market

The labour market has shown signs of cooling. The number of employees on payroll has dropped in seven of the last eight months. The unemployment rate has gone up slightly this year, and the data now seems more reliable than in past years. Job vacancy data from Indeed shows that the UK job market has slowed down more than other major economies.

Bank of England (BoE) Meeting Preview: Job Market Holds the Key as 25 bps Cut Looms_1

Slowing Economic Growth

Economic growth has been weaker than expected since the June MPC meeting. The economy shrank by 0.3% in April and 0.1% in May, falling short of the BoE's Q2 growth forecast of 0.25%. The UK economy is struggling with slow growth, a weak housing market, and declining business confidence.

These poor growth numbers are the main reason for the BoE's expected rate cuts, as they pose a bigger risk to stability than high inflation. This shows the Bank is shifting its focus to supporting the economy, even with inflation above target.

Sticky Inflation Keeps the BoE Careful

Inflation remains a key concern despite recent declines. In June 2025, headline inflation (CPI) rose to 3.6%, up from 3.4% in May, staying well above the BoE's 2% target. Core CPI also increased to 3.7%, and services inflation stayed high at 4.7%, reflecting strong domestic price pressures.

Food prices, higher wages, and rising labor costs are driving inflation. The BoE is particularly cautious when CPI is between 3.5% and 4%, as it risks becoming long-term. Inflation is expected to average 3.4% in 2025, drop to 2.6% in 2026, and hit the 2% target in late 2026.

Services inflation is slow to improve due to factors like annual price setting in April, meaning noticeable changes may not appear until next spring. This delay forces the BoE to take a careful approach to rate cuts, avoiding moves that could reignite inflation before these pressures ease.

Outlook Moving Forward: The Path of Monetary Policy

If we do get a rate cut tomorrow, analysts predict the Bank of England (BoE) will continue with gradual 0.25% cuts every quarter. Markets expect one final cut in November 2025, bringing the rate to 3.75%. Some forecasts, like Danske Bank, predict further cuts into 2026, lowering rates to 2.75%, while others, like the OECD, expect rates to settle at 3.5% by 2026. The BoE has hinted at more cuts if conditions remain stable but hasn’t specified details.

The BoE’s easing contrasts with the US Federal Reserve’s cautious approach, as the Fed held rates steady at 4.25%-4.50% in July due to inflation risks. However, last week's jobs data has significantly changed the outlook for the Federal Reserve moving forward.

The BoE’s rate cuts face risks, including inflation staying above target longer than expected, the impact of past rate hikes as households refinance mortgages, and tighter government budgets.

Global challenges, like US tariffs and geopolitical instability, add further pressure. These factors mean the BoE will likely take a slow and cautious approach to rate cuts, extending into 2026, as the economic outlook remains uncertain.

Technical Analysis - GBP/USD

From a technical standpoint, GBP/USD has arrested its recent slide which coincided with US Dollar weakness.

The selloff which reached a low of 1.3141 last week before recovery still may have further legs.

A rate cut by the BoE has probably been priced in which means the actual rate decision may do little to move GBP/USD tomorrow.

However, if Governor Bailey issues any hawkish remarks, this could help edge GBP/USD lower toward last week lows.

Only a daily candle close above the swing high at 1.3585 will invalidate the bearish setup and may be a sign that momentum is shifting.

Heading into tomorrow, immediate resistance rests at 1.3378 before the 1.3500 handle comes into focus. On the downside, last week's lows at 1.3141 may provide support with a break below opening up a retest of the key pivot level at 1.3000.

GBP/USD Daily Chart, August 6, 2025

Source: marketpulse

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Adam

Economic

Donald Trump’s advisers are encouraging him to nominate a temporary Federal Reserve governor to fill the soon-to-be vacant seat on the central bank’s board, according to people familiar with the discussions.

Naming a governor to serve out the term for the seat opening soon — set to expire in January 2026 — would give Trump additional time to interview candidates to serve as chair when Jerome Powell’s tenure leading the central bank ends in May of next year, the people said. Fed Governor Adriana Kugler announced last week that she plans to vacate her role on Aug. 8.

A short-term governor is likely to be someone who is already in the government and who has previously been confirmed by the Senate for a federal job, two people said. The nominee will need to clear Senate confirmation, a vetting process that has traditionally taken months, but could be expedited if Trump pressures lawmakers to quickly fill the seat.

Trump is slated to meet with advisers on Wednesday about the Fed pick, one person said.

Trump on Tuesday said he would make his decision for a replacement for Kugler this week as he looks to make his imprint on the central bank. No decision should be deemed final until announced by Trump, a White House official said.

Trump on Tuesday said that he’s weighing whether to fill the seat with a short-term pick or someone he would likely elevate to Fed chair next year.

“We’ll either decide on one for permanence or the four-month period — the term. You know, there’s a term of about a number of months,” Trump told reporters at a White House event on Tuesday.

Kugler’s early departure hands Trump a sooner-than-anticipated opportunity to fill the Fed board with a governor who more closely aligns with his preference for lower interest rates.

Trump has been highly critical of the Fed, repeatedly blaming the central bank and Powell for being too slow to lower interest rates. Trump has argued the central bank — which has so far left rates unchanged in 2025 — is keeping the federal government’s debt-servicing costs too high and restraining economic growth.

But the addition of a dovish governor to the Federal Open Market Committee, which sets policy, is unlikely to yield an immediate shift. The FOMC is composed of the seven members of the Board of Governors, based in Washington, and five of the Fed’s regional reserve bank presidents. A majority vote is required to adjust rates.

Among the broader group of 19 policymakers who participate in FOMC meetings, a majority signaled in June that they expect two rate cuts this year, a projection that makes a move in September a strong possibility.

Two Fed governors Christopher Waller and Michelle Bowman, both Trump appointees, voted against the July decision to hold rates steady, the first time two members of the board had dissented since 1993.

Trump on Tuesday said he was considering four candidates for the post of Fed chair, including Federal Reserve Governor Kevin Warsh and National Economic Council Director Kevin Hassett. He also said that Treasury Secretary Scott Bessent had said he did not want to be in consideration for the post.

“We’re looking at the Fed chair, and that’s down to four people right now,” Trump said Tuesday. “Well, I can tell you because I’ve already said, there’s two Kevins and two other people.”

Source: Bloomberg

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Russia-Ukraine Conflict

Commodity

Oil fell for the fifth straight session as traders waited to see whether US President Donald Trump would impose more severe measures to restrict Russian energy flows. Crude extended losses in late trading on a report that Trump plans to meet with Russian President Vladimir Putin soon.

West Texas Intermediate dipped 1.2% to settle just above $64 a barrel, notching the longest daily losing streak since September, as traders positioned for the possibility of a softer stance on Russia than the White House previously telegraphed. Futures dipped further after the New York Times reported that Trump plans to meet with Putin in person as soon as next week and follow that up with a meeting between himself, Putin and Ukrainian President Volodymyr Zelenskiy.

Trump earlier highlighted “great progress made” in a meeting between his envoy and Putin, but didn’t rule out the possibility of further penalties on Moscow’s oil revenues. The developments injected further uncertainty into a market that already was grappling with mixed signals on supply and demand.

On the one hand, US crude inventories fell as domestic refiners run at the highest levels since 2019 seasonally. On the other, Trump has said repeatedly that he wants to see lower oil prices and an end to the war in Ukraine.

In a CNBC interview Tuesday, he said that “if energy goes down low enough, Putin’s going to stop killing people.”

“If you get energy down another $10 a barrel, he’s going to have no choice, because his economy stinks,” Trump added.

The White House announced an additional 25% tariff on India over its purchases of Russian energy this week. Still, the levies on India won’t come into effect for another 21 days, meaning traders will remain on edge in case Trump makes further moves.

US special envoy Steve Witkoff held talks with Putin in the Russian capital on Wednesday, just two days before a deadline Trump set for Moscow to halt the war in Ukraine. The Kremlin said the meeting was constructive and the two sides exchanged “signals” over the conflict, Russian media reported.

US crude futures have largely traded between $65 and $70 since the end of June as traders wait to see if Trump’s tariffs will hurt global consumption and whether his pressure on India will reshape the country’s oil-buying patterns.

Traders are also monitoring OPEC+ output increases. Last weekend, the alliance agreed to hike production again in September, boosting concerns that global supplies will run ahead of consumption this half.

Saudi Arabia lifted its crude prices for a second-consecutive month, signaling confidence in demand and limiting oil’s losses. Diesel markets also continued to remain tight, offering support.