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The US government has commenced national security investigations that may result in tariffs on semiconductor and pharmaceutical products, potentially intensifying the trade conflict.
President Donald Trump has consistently indicated plans to impose significant tariffs on these sectors, with US officials revealing that consumer electronics could also be included in the semiconductor investigation.
These investigations arise even after a series of tariff reversals in recent days, including Trump’s recent decision to delay imposing high “reciprocal” tariffs on many countries and the announcement of a temporary exemption for consumer electronics that benefits tech companies dependent on Chinese imports.
In two different filings with the federal register on Monday afternoon, the US revealed it is assessing the national security implications of importing semiconductors, semiconductor manufacturing equipment, as well as pharmaceuticals, their components, and related products.
The pharmaceuticals investigation spans both finished generic and brand-name drug products, as well as essential inputs like active pharmaceutical ingredients, according to the filings.
These investigations were initiated by Commerce Secretary Howard Lutnick on April 1, as documented in the filings, which preceded Trump’s announcement of the now-delayed “reciprocal tariffs” on what he termed liberation day.
Such investigations, referred to as Section 232 investigations, typically take several months to conclude and involve a period for public comment. The Trump administration has indicated it will allow a 21-day comment period.
The filings come as Trump signaled he may adjust his tariff policies.
Earlier on Monday, Trump mentioned he was “considering support for automotive companies” producing vehicles in North America.
“They’re transitioning to parts made in Canada, Mexico, and other regions, and they need a bit more time, because they’re committed to producing here,” Trump stated from the Oval Office on Monday.
Last month, Trump imposed significant tariffs of 25 percent on car imports and parts, a move that risks raising costs for American consumers and disrupting global automotive supply chains.
Under the current trade framework, vehicles and parts manufactured in Canada and Mexico are subject to lower tariffs and only face the 25 percent tariff on non-US components if they comply with the provisions of the 2020 USMCA trade agreement.
Trump’s remarks on Monday imply he may grant automakers additional time to transition their supply chains to North America.
Shares of the major three automakers — Ford, Stellantis, and General Motors — increased on Monday, with GM gaining over 3 percent, Ford rising 4 percent, and US-listed shares of Chrysler parent Stellantis climbing 5.6 percent.
The trio has been advocating for months for a complete exemption from tariffs for vehicles and parts that comply with USMCA.
Matt Blunt, president of the American Automotive Policy Council, which represents all three automakers, remarked: “There is an increasing recognition that some of these parts tariffs are producing unintended results and complicating the assembly of vehicles within the United States.”
Automakers have also been impacted by Trump’s 25 percent tariffs on steel and aluminum imports, with some vehicle manufacturers facing additional duties, including Trump’s 20 percent tariffs on China.
Blunt emphasized, “There is an acknowledgment that certain individual tariffs on parts are hampering the objective of manufacturing in the US, a goal we share with the administration.”
Trump on Monday characterized himself as a “highly adaptable individual.”
