Introduction
The Biden-Trump era of escalating trade measures may enter a new phase as President Donald Trump’s administration considers launching a national security investigation into semiconductor imports: Section 232. The move could trigger sweeping tariffs on one of the world’s most crucial technologies.
According to a POLITICO report citing a senior White House official, Trump plans to instruct the Commerce Department to investigate whether foreign semiconductor imports threaten national security. The probe would be conducted under Section 232 of the Trade Expansion Act of 1962, the same provision used to justify steel and aluminum tariffs during Trump’s first term.
This announcement comes as the global chip industry recovers from years of supply chain disruptions, and just as tensions with East Asian trading partners start to flare again.
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5 Key Takeaways
Trump plans a national security probe into semiconductor imports using Section 232 powers.
The Commerce Department will lead the investigation, possibly on an accelerated timeline.
Tariffs could hit imports from Taiwan, South Korea, Japan, Malaysia, and China.
Section 232 allows trade restrictions if imports threaten U.S. national security.
The probe may reshape global chip supply chains and spark new trade tensions.
Background: What Is Section 232?
Section 232 of the Trade Expansion Act of 1962 gives the U.S. president authority to impose tariffs or quotas on imports that could harm national security. The provision has historically been rare but gained traction during Trump’s first term, when he used it to impose tariffs on steel and aluminum imports from allies and rivals alike.
In the case of semiconductors, the administration argues that foreign dependency on advanced chips could expose U.S. military, intelligence, and economic systems to vulnerabilities.
Why Target Semiconductors Now?
Semiconductors power everything from smartphones and electric vehicles to fighter jets and satellites. The U.S. remains a global leader in chip design, but most chip manufacturing has shifted to Asia—particularly Taiwan, South Korea, Japan, and increasingly Malaysia.
China, the world’s largest semiconductor consumer, remains heavily reliant on these imports as it accelerates efforts to become self-sufficient. Meanwhile, the U.S. has struggled to rebuild domestic chip manufacturing capacity despite initiatives like the CHIPS and Science Act of 2022, which pledged $52 billion in subsidies.
Trump’s push for a Section 232 investigation suggests a return to aggressive trade measures. “This is about reviving U.S. manufacturing in critical technologies,” the official told POLITICO. “We need to reduce our reliance on foreign suppliers.”
Potential Targets: East Asian Allies and China
If the White House proceeds with tariffs, the biggest impact could fall on U.S. allies in the Asia-Pacific. Here’s how major players might be affected:
Taiwan: Home to TSMC, the world’s most advanced chipmaker. The U.S. heavily relies on Taiwanese chips, especially for AI and high-performance computing.
South Korea: Samsung and SK Hynix lead global memory chip production. Any tariffs could hit consumer electronics and cloud providers.
Japan: Supplies key semiconductor equipment and materials. Tokyo is already ramping up its own chip strategy to reduce reliance on China.
Malaysia: A vital node in backend chip assembly and testing.
China: Though not a leading exporter of advanced chips, China’s growing fab capacity and tech ambitions make it a long-term rival.
Tariffs could disrupt global supply chains and raise prices for U.S. manufacturers.
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Timeline and Process
Typically, a Section 232 investigation takes up to 270 days. However, the White House may seek to fast-track the process amid mounting political pressure to demonstrate economic toughness ahead of the 2026 midterms.
The Commerce Department will open a public comment period, inviting input from industry stakeholders, national security experts, and the public. This transparency measure aims to assess economic impact before any final tariff decision.
If the Department finds that semiconductor imports indeed pose a security threat, Trump could act swiftly to impose tariffs—possibly before the end of 2025.
Economic and Geopolitical Impacts
Imposing tariffs on semiconductors could:
- Raise costs for U.S. companies like Apple, AMD, NVIDIA, and Tesla, which depend on imported chips.
- Strain relationships with key allies in East Asia already worried about U.S. trade unpredictability.
- Complicate global supply chains, as firms scramble to reroute manufacturing or absorb higher costs.
- Add fuel to the U.S.-China tech rivalry, with Beijing likely to retaliate through its own measures.
- Accelerate regional chip alliances, such as the U.S.-Japan-South Korea trilateral tech partnerships announced in 2023.
Industry Reactions
The global chip industry is on alert. The Semiconductor Industry Association (SIA) issued a brief statement expressing concern: “Unilateral tariffs may undermine U.S. competitiveness rather than strengthen it. We urge the administration to pursue collaborative solutions.”
Meanwhile, analysts at Goldman Sachs and Morgan Stanley warned that tariffs could lead to higher consumer electronics prices and delay AI and cloud infrastructure projects.
Investors responded cautiously. The Philadelphia Semiconductor Index (SOX) fell 1.3% after the news broke, with shares of TSMC and Samsung seeing slight dips in overseas trading.
Looking Ahead: A Trade War 2.0?
This latest move signals a possible return to the trade war era of 2018-2020, when tit-for-tat tariffs between the U.S. and China roiled global markets. But this time, the focus is squarely on technology and national security, not just trade imbalances.
The Trump administration’s message is clear: “Secure the supply chain or face the consequences.”
But critics argue that the U.S. risks isolating allies and destabilizing an already fragile global economy. With elections looming and the semiconductor race heating up, the stakes for American tech leadership have never been higher.
Conclusion
Whether the probe ends in tariffs or not, the move underlines Washington’s growing reliance on trade tools to enforce industrial policy. As semiconductors become the new oil of the 21st century, national security and economic policy are more tightly linked than ever before.
For tech investors, supply chain managers, and policymakers, this potential Section 232 investigation marks a pivotal moment. Stay tuned—the chip wars are far from over.
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