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The United States has initiated national security investigations that could result in tariffs on semiconductor and pharmaceutical products, potentially escalating the trade conflict significantly. President Donald Trump has frequently mentioned his intent to impose substantial tariffs on these industries. According to US officials, consumer electronics might also be included in the semiconductor investigation.
These investigations are taking place despite recent changes in tariff policies, including Trump’s decision to temporarily halt stringent “reciprocal” tariffs against various countries and a temporary exemption for consumer electronics, benefiting technology companies that depend on Chinese imports.
On Monday afternoon, two separate federal filings indicated that the US was examining the national security ramifications of importing semiconductors and their manufacturing equipment, as well as pharmaceuticals, their ingredients, and related products. The pharmaceuticals probe encompasses both finished generic and brand-name drug products, as well as critical components like active pharmaceutical ingredients, as stated in the filing.
Commerce Secretary Howard Lutnick initiated these investigations on April 1, the day before Trump’s announcement of the now-paused “reciprocal tariffs” on what he termed “liberation day.” Known as Section 232 investigations, these probes typically take several months to complete and necessitate a period of public notice and comment. The Trump administration plans to gather public feedback for 21 days.
These filings emerge as Trump hints at refining his tariff strategy. Earlier on Monday, he mentioned he was considering measures to assist car companies manufacturing vehicles in North America. He noted that some companies are transitioning to using parts made in Canada, Mexico, and other locations and require additional time to produce them domestically.
In the previous month, Trump announced significant tariffs of 25 percent on car and part imports. This move could raise costs for American consumers and disrupt global automotive supply chains. Cars and parts manufactured in Canada and Mexico are subject to reduced duties and only incur the 25 percent tariff on their non-US content if they comply with the rules outlined in the 2020 USMCA trade agreement.
Trump’s remarks suggest he might allow car manufacturers extended time to relocate supply chains to North America. Shares in major carmakers, Ford, Stellantis, and General Motors, experienced an increase on Monday, with General Motors rising by more than 3 percent, Ford by 4 percent, and US-listed shares of Chrysler parent Stellantis climbing by 5.6 percent.
These automakers have been advocating for the administration to exempt cars and parts complying with USMCA from tariffs entirely. Matt Blunt, president of the American Automotive Policy Council, representing all three companies, remarked on the growing recognition that some parts tariffs have had unintended consequences, complicating vehicle assembly in the US.
Automakers have also been affected by Trump’s 25 percent tariffs on steel and aluminum imports, along with other duties, such as the president’s 20 percent tariffs on China. Blunt commented that there is an understanding that certain individual tariffs on parts undermine the objective of promoting US manufacturing, a goal shared with the administration.
On Monday, Trump described himself as a “very flexible person.”
