The Trump administration is contemplating imposing new tariffs on semiconductors following the exemption of certain electronics from reciprocal tariffs. President Trump announced on social media that an investigation into semiconductors and the entire electronics supply chain will be conducted under Section 232 of the Trade Expansion Act of 1962. This section allows the president to restrict imports deemed critical to national security after an investigation.

Kevin Hassett, director of the National Economic Council, emphasized the importance of semiconductors in defense equipment and the need to protect America by potentially on-shoring semiconductor production. He likened the possible semiconductor tariffs to the existing 25% tariffs on steel and aluminum, which were also issued under Section 232.

The move towards additional semiconductor tariffs, which are vital components in various products like cars and cell phones, comes shortly after the lifting of reciprocal tariffs on certain electronics by U.S. Customs and Border Protection. Commerce Secretary Howard Lutnick indicated that the electronic tariff exemptions are temporary and will be replaced by forthcoming semiconductor tariffs.

Considering China is the primary source of electronic products for the U.S., these potential tariffs could significantly impact global trade dynamics. The administration’s focus on reshoring semiconductor production underscores national security concerns and the desire to reduce reliance on foreign supply chains.