Trump Admin Launches National Security Probe Into Pharma, Semiconductor Imports

The probe will assess current and projected demand for semiconductors and pharmaceuticals in the country, among other factors.

Semiconductor chips are seen on a circuit board of a computer in this illustration picture taken Feb. 25, 2022. Florence Lo /Illustration/File Photo /Reuters

The Trump administration has launched an investigation into the effects on national security of importing semiconductors and pharmaceutical products, according to Federal Register filings on Monday.

The Commerce Department, in a pair of Federal Register notices set to be published on April 16, said that the probes were initiated under Section 232 of the Trade Expansion Act—which allows the president to impose tariffs on imports considered a threat to national security.

The department stated that it began investigating the national security implications of importing semiconductors and semiconductor manufacturing equipment (SME) on April 1.

This includes “semiconductor substrates and bare wafers, legacy chips, leading-edge chips, microelectronics, and SME components,” as well as derivative products of those items, according to one of the filings.

The probe will assess current and projected demand for semiconductors and SME in the United States; the extent to which domestic production can or is expected to meet that demand; the role of foreign fabrication and assembly; the concentration of U.S. semiconductor imports; and the potential for export restrictions by other nations; among other issues.

In another notice, the department said it was investigating imports of pharmaceuticals and their ingredients. This includes “finished generic and non-generic drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients and key starting materials, and derivative products of those items.”

The investigation aims to examine issues similar to those concerning semiconductor imports, such as the current and projected demand for pharmaceuticals and their ingredients in the country; the role of foreign supply chains in meeting that demand; and the impacts of foreign government subsidies and predatory practices on U.S. pharmaceutical industry competitiveness.

The department also seeks to assess the economic impact of “artificially suppressed prices” of pharmaceuticals and their ingredients resulting from “unfair trade practices and state-sponsored overproduction.”

Both filings are open to public comment for 21 days, although Section 232 investigations may take up to 270 days to complete.

Those filings follow President Donald Trump’s move to exempt smartphones, computers, servers, laptops, tablets, and other electronic products from reciprocal tariffs, according to updated guidance from Customs and Border Protection published on April 11.

Those items will be exempt from the tariffs imposed on foreign countries by Trump, including the 145 percent tariff imposed on China, a major manufacturer and supplier for all of these components.

Commerce Secretary Howard Lutnick said on ABC’s “This Week” that electronic product imports will fall under the separate tariff plans that focus on semiconductors.

The filings also came after Trump announced in a Truth Social post on April 13 that his administration will initiate a national security trade probe into the semiconductor sector.

“These products are subject to the existing 20% Fentanyl Tariffs, and they are just moving to a different Tariff bucket,’” he stated. “We are taking a look at Semiconductors and the whole electronics supply chain in the upcoming National Security Tariff Investigations.”

The copper and timber industries have already seen Section 232 investigations by Trump over the past two months, and the president used the results of one 232 investigation from his first term to defend increasing aluminum and steel tariffs in March.

On April 2, Trump announced a minimum 10 percent tariff on all trading partners, as well as higher levies on about 60 nations identified as “worst offenders” in trade imbalances with the United States.

The president subsequently paused almost all of his tariffs for 90 days after declaring that he was brokering trade deals with numerous partners, but he kept tariffs on Chinese imports at 145 percent.

Many world leaders have moved to initiate negotiations with Trump, including reducing or removing their own tariffs on the United States, while some like China have weighed countermeasures. China has hit the United States with a 125 percent tariff.

Jacob Burg and Naveen Athrappully contributed to this report.