BANGKOK — The Trump administration is moving forward with plans to implement additional tariffs on critical imports, initiating investigations into the imports of computer chips, chip-making equipment, and pharmaceuticals. Late Monday, the Department of Commerce released notices on the Federal Register, seeking public input over the next three weeks, though it hadn’t previously announced the probes officially.
Despite a recent pause on the majority of his major tariff hikes for 90 days, aside from those targeting imports from China, President Donald Trump has indicated that he still intends to impose tariffs on items such as pharmaceutical drugs, lumber, copper, and computer chips.
The Commerce Department’s investigation is focused on understanding how the importation of computer chips, the equipment to manufacture them, and related products like cars, refrigerators, and smartphones may affect national security. Under Section 232 of the Trade Expansion Act of 1962, the president can authorize tariffs if they are deemed necessary for national security.
The ongoing investigation will also evaluate the potential of domestic computer chip production to meet the U.S. demand and the role of international manufacturing, testing, and packaging in fulfilling these needs. Further, the inquiry is set to assess the risks associated with concentrating chip production in specific global locations and how foreign governmental subsidies and unfair trade practices might impact U.S. competitiveness.
While Trump has excluded electronics from his administration’s “reciprocal” tariffs, which could reach up to 50% on some countries, Commerce Secretary Howard Lutnick clarified in an ABC News interview that pharmaceuticals, semiconductors, and automobiles will be subject to “sector-specific” tariffs.
“And those are not available for negotiation,” Lutnick stated. “They are just going to be part of making sure we reshore the core national security items that need to be made in this country. We need to make medicine in this country,” Lutnick emphasized. “We need to make semiconductors too.”
Concerning pharmaceutical imports, the probe considers the ingredients used to manufacture these drugs, spotlighting many identical concerns stemming from dependency on imports. In addressing tariff plans on pharmaceuticals, Trump affirmed on Monday, “Yeah, we’re going to be doing that.”
This move, he added, would occur in the “not too distant future.” “We’re doing it because we want to make our own drugs,” he remarked.
Currently, over 70% of the materials or active pharmaceutical ingredients used for drugs manufactured in the United States are sourced from abroad, with India, the European Union, and China as leading suppliers. Although the U.S. produces about 20% of the world’s pharmaceuticals, it consumes approximately 45%, outpacing any other country.
While the U.S. manufactures some semiconductor types, it heavily imports advanced chips from regions like Taiwan and South Korea. According to the International Trade Administration, Taiwan commands an impressive 92% of all advanced logic chip production capacity, leaving 8% to South Korea.
Electronics such as laptops, smartphones, and their components comprised almost $174 billion in U.S. imports from China last year. Current administration plans suggest these electronics could remain subject to prior tariffs as well as potential new, sector-specific taxes.
Although prominent chip manufacturers, including Taiwan Semiconductor Manufacturing Corp., have been increasingly investing in U.S.-based facilities—driven partly by incentives during former President Joe Biden’s tenure—transitioning entire supply chains domestically would be a lengthy and expensive endeavor.
Separately, on Monday, the Commerce Department announced it would terminate a 2019 agreement that had paused an antidumping inquiry into fresh tomato imports from Mexico, effective in 90 days. It indicated that the existing framework failed to safeguard U.S. producers from “unfairly priced” tomato imports. Consequently, most Mexican tomatoes will be subjected to a 20.91% tariff.