Washington: If a semiconductor firm commits to building its factory in the United States during President Donald Trump's term and fulfills the commitment, its chips would not face a tariff, the commerce secretary said Thursday, a day after Trump unveiled a plan to impose about a 100 percent tariff on chip imports. Secretary Howard Lutnick made the remarks during a Fox Business interview as South Korean tech firms, Samsung Electronics Co. and SK hynix Inc., have been carefully watching his tariff policy developments.

According to Yonhap News Agency, Lutnick explained that if a company commits to constructing its facility in the U.S. during Trump's term, files the commitment with the Commerce Department, and has its auditor oversee the process, it can import chips without a tariff while the factory is being built. However, the construction must be confirmed and overseen in America.

Trump's announcement on the new tariff came after he mentioned that his administration plans to announce sector-specific tariffs "within the next week or so." Some observers speculated that Samsung Electronics and SK hynix might avoid the new tariff as they have been working on investment plans in Texas and Indiana, respectively.

To impose the tariff on semiconductor imports, Trump has invoked Section 232 of the Trade Expansion Act of 1962. This law provides the president with the authority to adjust imports into the U.S. when he determines they threaten to impair national security.