Uncertainty over tariffs has U.S. firms holding off on expansion or relocation
The uncertainty caused by a trade war pitting the U.S. against much of the world is a double-edged sword for economic development across Central Texas and Williamson County, which in the last five years has become a darling for foreign investment.
But at the same time, what some see as economic chaos is curtailing or postponing expansions or relocations of U.S. born-andbred companies, officials said.
That could be a boon to Williamson County in the long run, analysts said.
“We’re seeing a big international uptick,” said Dave Porter, CEO of the Williamson County Economic Development Partnership.
Thanks to the nearly $40 billion investment in an advanced semiconductor foundry and research facility by Samsung Electronics Co. Ltd. in Taylor, the county has had an office in South Korea since mid-2023 and conducted numerous missions to that country, Taiwan and Japan.
That has led to more U.S. headquarters of foreign companies or manufacturing operations moving to the county, some related to the burgeoning semiconductor industry in Central Texas.
The state of Texas opened an office in Taiwan last summer and Porter said businesses from that country are showing interest in Williamson County.
“I think we’re front of mind for the Taiwanese now,” he said.
In late April, President Donald Trump exempted the importation of chips from the island from tariffs first imposed in March and revised in early April. Taiwan Semiconductor Manufacturing Co., or TSMC, is one of the largest chip suppliers to the U.S. but is increasing its investment to manufacture in Arizona with plans to spend at least $100 billion.
The story of Samsung’s investment in Taylor and upcoming expansions of the Samsung Austin Semiconductor campus in Austin is part of a burgeoning semiconductor ecosystem in Central Texas that includes suppliers, logistics, academic training and research and a commercial and industrial construction boom.
As the hiring ramps up over the next two years, another ripple of restaurant, retail and various consumer services is expected to follow.
It also garnered attention from the broader international community. Porter said there are even European companies now in talks with economic development officials in Williamson County.
While tariffs may be hastening foreign investment in U.S.-based supply chains and manufacturing, the on-again, offagain nature of the tariffs and sudden announcements of carveouts for certain goods has kept U.S. companies from investing in their own operations.
At press time, many of those companies receive some materials or parts from foreign companies with a levy of 10% tariffs. For steel and aluminum, the tariffs sit at 25% while tariffs on most goods from China are at 145%. The tariff is paid by the importer and the increased cost is passed on to the U.S. manufacturer and ultimately the consumer.
“We’re seeing a big drop-off in domestic interest in relocating or expanding,” Porter said of American companies wary of tariffs staying in place or going away with negotiations.
Trump has floated the idea of keeping the tariffs to fill government coffers, but he also is in a dealmaking phase country by country to garner what he considers better trade terms that would have them purchase more U.S.-made goods.
“It’s hard to make decisions unless there’s more certainty,” Porter said. “Then, when there is a certainty, what are the rules of engagement (to do business going forward?) In my business you have to prepare for the worst and hope for the best. What if (the tariffs) aren’t a short-term play?”
Porter said to expect some decisions this summer from companies looking to locate to Williamson County. Some need to be here quickly because of existing business arrangements, but others are holding off to see if tariffs stay, go away or if certain materials and goods are exempted.
“It’s still a moving playing field but I think things will pick up when (we) get some certainty,” Porter said.
Taylor Economic Development Corp. CEO Ben White sees only blue skies ahead.
“I think we’re on a positive upswing,” said White, who predicts that East Williamson will see many more projects in the coming years. “The uncertainty, I think we’re on the other side of that.”
A five-county area that includes Williamson makes up the federally designated Foreign Trade Zone of Central Texas and means a reduction in tariffs, broker fees and other expenses related to imports coming in and exports going out.
White said that means materials coming in from South Korea aren’t hit with the tariffs.
“The last six weeks has been the busiest in the year and a half. There are more leads than ever, for companies looking to set up shop in Taylor,” he said. “All these projects are in many different sectors” and are both foreign and domestic companies.
White pointed to a recent agreement with the South Korean company iMarket, which is developing more than 200 acres at Carlos G. Parker Boulevard and East Walnut Street, which is now dubbed Gradient Business Park. The park will have 2 million square feet of industrial space for companies, including Samsung suppliers and additional for retail and other mixed uses.
The sticking point was iMarket’s hesitation to put in the money for infrastructure including wastewater treatment. The Taylor EDC board approved about $1 million to help pay those costs and extend wastewater services.
In addition, the EDC will use tax dollars raised through economic development deals to pay up to $1.5 million to move the business park property out of the jurisdiction of the Manville Water Supply Corp.
While Samsung is still a major draw to Williamson County, the two-year delay to operational status now slated for the end of 2026 reflected some market changes for semiconductors.
A call by Trump for Congress to kill the U.S. CHIPS & Science Act, which has provided billions of dollars in grants for chip makers to expand here, has so far gone unheeded. To date, he hasn’t tried to cancel grants to companies such as Samsung, TSMC or Intel by executive order.
There is little appetite in Congress to kill the bipartisan bill aimed at securing the means to make the most advanced semiconductors on U.S. soil and not be beholden to overseas manufacturers.
A February opinion penned by U.S. Sen. John Cornyn, R-Texas, and U.S. Rep. Michael McCaul, a Republican whose district includes parts of Williamson County, reminded the president the CHIPS Act stemmed from his first administration, even though funding was allocated in 2022 during the Biden Administration.
“A recent study indicates the technology industry contributes more than $469 billion to the Texas economy. Today, Texas has the second largest semiconductor workforce in the nation totaling more than 42,000 Texans with more to come thanks to our joint efforts,” they wrote.
The op-ed, meant to convince Trump to protect the CHIPS Act and its funding, touched on common themes of the 47th president including vilifying his former rival Biden and invoking the threat of communism and homeland security. The plea had little impact, because Trump called for Congress to kill the act shortly afterwards in an address to a joint session of Congress.
Meanwhile, the impact of the semiconductor ecosystem has continued to produce positive benefits for Taylor and the surrounding area despite the delays in hiring.
On April 30, the Taylor City Council approved some renegotiated terms with Samsung to provide additional income for the city and capping expenses that could have cost the town an extra $16 million.
Property-tax abatements and other tax breaks from the city were part of the deal Taylor cut with the company to bring in an advanced semiconductor manufacturing and research facility first announced in November 2021.
Construction on the massive semiconductor foundry started in 2022, with manufacturing operations slated to start in late 2024. Changes in the market, including demand for even smaller chips, led to delays in meeting certain milestones to get the property-tax breaks, including job creation.
The Samsung property sits inside a Tax Increment Reinvestment Zone that allows a large portion of the property taxes collected on the value of the improved property to flow back to Samsung to reimburse it for the infrastructure on the site. Property taxes in the TIRZ do not go to the city’s general fund for running Taylor, paying first responders or filling potholes.
The amendment passed in the special council meeting April 30 carves out the taxable asset of Samsung contractor Linde Gas, which is located with Samsung in the reinvestment zone.
That means taxes assessed on Linde’s improvements to the property and equipment on site will now go into the city’s general fund to spend on any needs the city has. The estimated annual income from the $281 million property is expected to be about $1.9 million a year, said city spokesman Daniel Seguin.
The city also was able to cap the amount of money it spent on contracting ongoing inspections of completed construction projects and phases on the Samsung site at $9 million.
The previous agreement capped out the city’s cost, including hiring inspection staff or hiring skilled contract inspectors, at $25 million.
“With the delay in operations we wanted to help our citizens and feel it is more important (to do it) now rather than later,” said Taylor Mayor Dwayne Ariola.
“The actions taken by the city of Taylor demonstrate mutual commitments to the success of Samsung’s project in Taylor, said Samsung Austin Semiconductor spokeswoman Michele Glaze. “We appreciate the partnership and leadership of the city of Taylor in aligning on adjustments to ensure the project proceeds as planned.”
Outgoing Councilman Gerald Anderson commended Samsung for its millions in donations to local nonprofits, the Taylor Independent School District and many other entities from the start beyond the scope of official agreements with local governments.
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