President Donald Trump said on CNBC’s Squawk Box on Tuesday that his administration is planning to announce tariffs on semiconductors and chips as soon as next week. However, the specifics of these tariffs remain unclear.

Such tariffs could cause quite a disruption for U.S. hardware and AI companies. When the U.S. CHIPs and Science Act was signed in 2022 — providing $52 billion in subsidies to boost domestic chip manufacturing — the U.S. produced only about 10% of global chips. Despite this small manufacturing footprint, more than half of global semiconductor companies are headquartered in the U.S.

Since then, some progress has been made toward boosting domestic chip manufacturing. Both Intel and Taiwan Semiconductor Manufacturing Company (TSMC) have received funding from the CHIPs Act. TSMC has also committed to spending “at least” $100 billion over the next four years on chip manufacturing plants in the U.S.

But setting up chip manufacturing plants takes time. Intel recently announced it was delaying construction on its Ohio chip manufacturing facility, again, highlighting the challenges of rapidly scaling up production.

The tariff announcement comes as the industry awaits the administration’s decision on AI chip export restrictions — rules that control which countries can purchase advanced semiconductors used in AI systems.

The Trump administration formally rescinded the Biden administration’s chip AI export rules in May. Those rules had established a country-specific, multi-tier approach to restricting chip exports based on national security concerns. The Trump administration then released its AI Action Plan in July, which emphasized the need for the U.S. to implement chip export restrictions but was light on the details of what that could look like.

According to reporting from Semafor citing industry sources, the Trump administration is now debating whether or not it should go through with its plan to rescind and replace Biden’s AI export rules.