U.S. discloses details on chips probe as it prepares new tariffs

The U.S. Commerce Department is conducting a national security investigation into imports of semiconductor technology and related downstream products, according to a Federal Register notice put online Monday. 

The official document — which calls for public comments on the investigation — further confirms that chips and the electronics supply chain will not be excluded from U.S. President Donald Trump’s tariff plans despite his statement on Friday that many of those products were exempt from his “reciprocal tariffs.”

As part of the probe, the Commerce Department will investigate the “feasibility of increasing domestic semiconductors capacity” in order to reduce reliance on imports and whether additional trade measures, including tariffs, are “necessary to protect national security.”

The investigation encompasses a wide range of items, including chip components such as silicon wafers, chipmaking equipment, and “downstream products that contain semiconductors.” 

Semiconductors play a role in essentially every type of modern electronics, giving the investigation massive implications for Trump’s global trade war as he seeks to boost U.S. manufacturing. 

While exemptions have been made on various electronics products, including smartphones, computers and semiconductors, Trump and some officials said over the weekend that the reprieve was temporary and part of plans to apply separate tariffs to the sector.

The semiconductor investigation — first initiated by the secretary of commerce on April 1 — sets the grounds for such tariffs to come into effect. 

The Commerce Department will first allow for public comments on the investigation to be submitted no later than 21 days from Wednesday.

However, on Sunday, Trump reportedly said he will be announcing new tariff rates on imported semiconductors over the next week, and that flexibility will be shown to certain companies. 

On the same day, Commerce Secretary Howard Lutnick told ABC News’ “This Week” that separate tariffs for semiconductors and electronic products were coming in “probably a month or two.” 

Trump’s Commerce Department cited the probe under Section 232 of the Trade Expansion Act of 1962, which can permit the U.S. president to impose tariffs on the grounds of national security.

The justification is being used for a similar investigation on pharmaceuticals and pharmaceutical ingredients, which was also disclosed on Monday.

The U.S. is heavily dependent on semiconductor technology imported from markets like Taiwan, South Korea, and the Netherlands. 

However, for years, Washington has been implementing policies aimed at onshoring more of the semiconductor supply chain, including through industrial policies such as the $280 billion CHIPS and Science Act. 

Nvidia, the chipmaker powering much of the artificial intelligence boom, announced on Monday a plan to design and build factories that, for the first time, will produce NVIDIA AI supercomputers entirely in the U.S.

Last month, Taiwan Semiconductor Manufacturing, the world’s largest chip foundry, announced its intention to increase its existing investments in advanced semiconductor manufacturing in the U.S. by an additional $100 billion.