Trump Signals Tariffs to Come on Semiconductors as Commerce Begins Probes of Chips, Pharmaceuticals

Notice of the investigations came after President Donald Trump said over the weekend that the exclusion of electronic components and products such as semiconductors and microchips from the April 2 reciprocal tariffs -- exclusions that were outlined in an April 11 CSMS message (see 2504120001) -- doesn't mean that those products won't have duties levied on them.

Rather, these products will get their own type of tariffs soon, Trump said in an April 13 Truth Social post.

"NOBODY is getting 'off the hook' for the unfair Trade Balances, and Non Monetary Tariff Barriers, that other Countries have used against us, especially not China which, by far, treats us the worst! There was no Tariff 'exception' announced on Friday," Trump posted.

These products will still be subject to the existing International Emergency Economic Powers Act tariffs, but instead of also being subject to reciprocal tariffs, these products will go into a "different Tariff 'bucket,'" Trump said.

Trump’s Cabinet members and advisers reiterated on the Sunday talk show circuit that the CBP message doesn't mean the U.S. won't tariff those products, which include smartphones and chips. They said the president’s plans to levy tariffs on semiconductors, as well as on pharmaceuticals and autos, are “outside” of the reciprocal tariff action, which Trump paused for most countries, except for China, for 90 days starting earlier this month (see 2504100014).

Commerce Secretary Howard Lutnick told ABC News on April 13 that his agency would be conducting investigations on the imports of semiconductors and pharmaceuticals so that Commerce can gauge how to apply tariffs on these goods.

Those notices are scheduled to be published in the Federal Register April 16. Public comments on both investigations are due by May 7.

For semiconductors, the Commerce will look into the imports of semiconductors and semiconductor manufacturing equipment and their derivative products. The agency is seeking comments on the economic impact of "artificially suppressed" chip and chip equipment prices caused by "foreign unfair trade practices and state-sponsored overcapacity;" the potential for export restrictions by foreign nations; and the feasibility of increasing domestic semiconductor capacity, among other issues.

For pharmaceuticals, Commerce will look into the imports of finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and the derivative products of those items. Commerce is seeking feedback on the current and projected demand for pharmaceuticals and pharmaceutical ingredients in the U.S.; the extent to which domestic production of pharmaceuticals and pharmaceutical ingredients can meet domestic demand; and the role of foreign supply chains, particularly of major exporters, in meeting U.S. demand for pharmaceuticals and pharmaceutical ingredients, among other issues.

The actual tariffs on semiconductors and pharmaceuticals may not come out until “the next month or two,” Lutnick said.

“They’re going to have a special focus type of tariff to make sure that those products get reshored,” Lutnick said. "We need to have semiconductors. We need to have chips, and we need to have flat panels. We need to have these things made in America. … Semiconductors and pharmaceuticals will have a tariff model in order to encourage them … to be built in America.”

White House Deputy Chief of Staff Stephen Miller told Fox News on April 13 that the U.S. is relying on a national security rationale to levy duties on electronic components and products that make up smartphones, computers and other equipment.

"That was always the plan, because those components are so essential to our national security, we need to have a separate process for dealing with how to reshore those essential industries," Miller said.