As promised, the Trump administration is moving ahead with a federal probe into the impact on US national security of imports of semiconductors and semiconductor manufacturing equipment.
The chip probe is expected to result in increased tariffs on chips and was announced Monday in the Federal Register. Trump and White House officials have suggested the chip probe will result in specific tariffs.
A similar probe into the impact on national security of pharmaceuticals and pharmaceutical ingredients and finished drug products was announced in a separate register notice.
The investigations are being made under section 232 of the Trade Expansion Act of 1962. Interested parties can submit written comments three weeks after the April 16 publication of the probes. The secretary of Commerce initiated the investigations on April 1. The results are expected within 270 days.
The probe is broad, looking at imports of semiconductors, manufacturing equipment and derivative products that include substrates and bare wafers, legacy chips, leading-edge chips, microelectronics and SME components. Derivative products include downstream products containing semiconductors such as products that “make up the electronics supply chain,” according to the notice. That would include a broad range of products from smartphones to servers.
In addition, the probe will look at criteria in federal regulations such as current demand for chips and embedded downstream products; whether domestic production can meet for each node size can meet domestic demand; the role of foreign fabrication and assembly, test and packaging facilities in meeting US chip demand. Notably, the probe will consider artificially suppressed chip prices due to unfair trade prices.
The notice was posted after a weekend of twists in electronics tariff policies, with tariff exemptions first announced late Friday by US Customs and Border Protection. On Saturday and Sunday, Trump and White House officials pulled back on those exemptions and suggested chips and pharmaceuticals would be subject to the probes.
Trump was insistent in a post on Truth Social that 20% tariffs on China remain in place despite the announced exemption from reciprocal tariffs that had reached 125% on China. The post on Sunday also previewed the probe on chips adding, “What has been exposed is that we need to make products in the United States, and that we will not be held hostable by other countries, especially hostile trading nations like China, which will do everything within its power to disrespect the American People.”
White House officials told reporters that at least seven countries are negotiating with the US on tariffs, including Japan and South Korea, but China was not among them.
Trump argues his tariff policies have already influenced trillions of dollars of private investment in semiconductor manufacturing in the US, including an announcement early Monday by Nvidia and several partners, including TSMC, to invest $500 billion in AI manufacturing facilities over four years in Texas and Arizona.
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