First, the U.S. Commerce Department has launched a national security investigation into the role of semiconductor technology and its associated downstream products. On April 1, Secretary of Commerce Howard Lutnick taken this momentous action. These initial steps will help determine the feasibility of implementing tariffs on critical imports that are necessary to support modern electronics manufacturing.
This investigation was initiated based on the grave national security threats. Today, the U.S. is highly reliant on foreign-produced semiconductor technology, particularly from Taiwan, South Korea and the Netherlands. Given that semiconductors are absolutely essential for nearly every modern electronic device, this investigation is immensely important to the future of U.S. semiconductor manufacturing.
The deadline for submitting public comments on the investigation is 21 days from Wednesday. That’s a powerful opportunity allowing impacted stakeholders to communicate their views on the ramifications of the investigation. The Commerce Department, we’re glad to see, is opening an inquiry. It will determine whether we are capable of rapidly increasing domestic semiconductor production capacity – an essential component of safeguarding our national interests.
There are huge stakes for former President Trump’s whole global trade policy in this investigation. He has pledged to support U.S. manufacturing as he battles a tide of rising trade hostilities. The probe was officially launched by the Commerce Department citing Section 232 of the Trade Expansion Act of 1962. This long-neglected section allows the U.S. president to impose tariffs ostensibly for the sake of national security.
Trump’s administration is leveraging the same rationale to investigate tariffs on all pharmaceuticals and their active ingredients. This signals a larger move to reconsider and even limit imports that are seen as dangers to U.S. national security.
The Commerce Department’s announcement further clarifies that semiconductors and the associated electronics supply chain will not be exempt from Trump’s tariff initiatives. Yet Trump is expected to announce these new tariff rates on all imported semiconductors in this very week. Perhaps even more importantly, this move represents a clear and overdue reversal on his administration’s trade policy.
Flexibility may be extended to certain companies affected by the forthcoming tariffs, as revealed by Lutnick during an interview on ABC News’ “This Week.” He estimated that separate tariffs for semiconductors and electronic products would be issued in the near future. Look for them in a month or two!