The ASX, as well as markets around the world, are currently reeling from US President Donald Trump's new tariff policies. Unveiled on the so-called 'liberation day' last week, a new 10% base-rate tariff is already in place on almost all imports into the United States.
Soon, the next phase will kick in when 'reciprocal tariffs' will be implemented. These reciprocal tariffs will only apply to some countries. Thankfully, Australia has been spared. But countries with a high trade surplus with the United States won't be so lucky. Taiwan is one of those countries.
Last week, Trump revealed that Taiwan would face a reciprocal tariff of 32% on all imports into the United States. However, that came with a major caveat. The administration also revealed that semiconductors and semiconductor-related goods would be exempt from the tariffs.
Semiconductors are Taiwan's major international export, and its most strategic industry. The country's pride and joy is the Taiwan Semiconductor Manufacturing Co., the undisputed leader in global semiconductor technology and manufacturing.
As such, this exemption is arguably a major boon for Taiwan and, by extension, for semiconductor investors worldwide. Today, let's discuss the exchange-traded funds (ETFs) that stand to benefit the most from this situation.
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Two ASX ETFs that will benefit from a semiconductor tariff exemption
First up, we have the BetaShares Nasdaq 100 ETF (ASX: NDQ). This index fund holds 100 of the largest companies that are listed on the United States tech-heavy Nasdaq stock exchange. Its largest holdings are dominated by the 'magnificent seven' – Apple, Microsoft, Amazon, Tesla, Alphabet, NVIDIA and Meta Platforms.
But you'll also find other big names like Netflix, PayPal, Palantir and Adobe here.
NDQ's largest holdings are all highly reliant on access to the most advanced semiconductors available. A 32% tariff on these semiconductors would have been a terrible cost for these stocks, but thanks to the exemption, these costs will be spared.
Next, let's check out the Global X Semiconductor ETF (ASX: SEMI). As its name implies, this ASX ETF holds a portfolio of international stocks in the semiconductor space. Its top holding is Taiwan Semiconductor Manufacturing Co, with a 10.55% weighting. But it also holds semiconductor-focused stocks like ASML, Broadcom, Qualcomm, Texas Instruments, and Advanced Micro Devices (AMD).
A semiconductor tariff would have dealt a hard blow to all of those names. But the exemption has spared this ETF from that pain. If you are a long-term believer in the future of semiconductors, then this ETF might be worth a look today.
