President Donald Trump has instructed the Commerce Department to initiate an investigation that could result in imposing tariffs on semiconductor technology to safeguard national security, as confirmed by a White House official to POLITICO.
Friction with Major Economies
This action sets the stage for potential conflicts between the U.S. and key East Asian economies, particularly Taiwan, a major chip supplier to the U.S. Other players in the semiconductor supply chain include South Korea, Malaysia, and Japan, with China leading in consumption.
Section 232 Probe Details
The inquiry, conducted under Section 232 of the Trade Expansion Act of 1962, empowers the president to limit imports that pose a national security risk. The aim is to rejuvenate U.S. manufacturing in critical technologies.
Implications and Timeline
If launched, the investigation will undergo a public comment phase and typically lasts up to 270 days. Trump has hinted at starting semiconductor tariffs at 25%, with potential increases in the future. The probe might extend to other sectors like pharmaceuticals.
Continued Tariff Action
This potential semiconductor tariff follows previous investigations into industries like copper and timber, as part of Trump’s trade strategy. The White House has also imposed tariffs on China during Trump’s second term, with ongoing negotiations with other countries.
Senator Warren’s Critique
Senator Elizabeth Warren criticized Trump’s tariff approach, citing its impact on investor confidence. Warren highlighted the need for a coherent strategy to attract investments into the U.S. market.
