Trump Moves to Slam Tariffs on Pharma and Semiconductors Over National Security Fears

The Trump administration has launched investigations into pharmaceutical and semiconductor imports, aiming to justify potential tariffs on national security grounds. According to notices scheduled for publication in the Federal Register, the public will have 21 days from that date to submit comments. The administration plans to pursue the tariffs under Section 232 of the Trade Expansion Act of 1962, which requires such investigations to be completed within 270 days of initiation.

232 Investigations Launched on Copper and Lumber Imports, Following $10 Billion in Tariffs on Steel, Aluminum, and Autos

The administration has initiated Section 232 investigations into imports of copper and lumber. Similar inquiries completed during Trump’s first term served as the basis for tariffs imposed since his return to the White House in January, including those on steel, aluminum, and the auto industry.

As of April 5, the U.S. began collecting a 10% tariff on imports. Pharmaceuticals and semiconductors are currently exempt, but Trump has stated they will be subject to separate tariffs. On Sunday, he announced plans to reveal the tariff rate on imported semiconductors within the coming week, noting that some companies in the sector may receive exemptions. Additionally the investigation will cover pharmaceuticals, pharmaceutical ingredients, and related derivative products, according to the official notice.

The United States remains heavily dependent on semiconductor imports from Taiwan, a reliance that former President Joe Biden aimed to reduce by awarding billions of dollars through the CHIPS Act to encourage chipmakers to expand domestic production. 

Taiwan plays a central role in the global semiconductor supply chain, with companies like TSMC manufacturing a significant share of the world’s advanced chips. U.S. officials have raised concerns that geopolitical tensions in the Taiwan Strait could disrupt access to critical technologies. In response, Washington has prioritized efforts to boost chip production within its borders.

“We want to uncomplicate it. We want to make our chips, semiconductors, and other things in our country. Financially, our country is going to be stronger than it’s ever been.” said Donald John Trump, 45th and 47th President of the United States of America.

New Tariffs Threaten $600 Billion Semiconductor Industry, Straining Global Supply Chains

President Trump has consistently described the foreign production of pharmaceuticals and semiconductors as a national security concern and has proposed tariffs on imports as a way to restore U.S. manufacturing in those sectors. However, such duties could disrupt global supply chains and increase costs for American consumers.

New tariffs could impact the semiconductor industry, which recorded over $600 billion in global sales and supplies essential components for a wide range of products, including automobiles, aircraft, smartphones, and consumer electronics. Supply chains already recovering from COVID-19-related disruptions may experience renewed pressure if the tariffs move forward. The administration’s announcement followed a recent decision to exempt semiconductors, mobile phones, computers, and other electronic imports from 145% tariffs on Chinese goods. 

The Commerce Department’s investigation into semiconductors will cover a broad scope, examining imports of both legacy and advanced chips, particularly those used in artificial intelligence. The probe will also include semiconductor manufacturing equipment and electronic products that contain these components, according to the government notice.

“This notice gives us some breathing room and visibility on when the tariffs might be expected, and we will be certainly looking out for the lobby actions that PHRMA and the industry CEOs will be engaging in over the next three weeks,” said Bernstein Research analyst Courtney Breen.

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Denisse Sandoval