The Trump administration is moving forward with plans to introduce new tariffs on critical imports, including computer chips, chip-making equipment, and pharmaceuticals. On Monday, the Department of Commerce made an announcement about these investigations, which will seek public feedback over the next three weeks.
Recently, President Trump deferred some of his more substantial tariff increases for a period of 90 days but remains committed to implementing tariffs on pharmaceuticals, lumber, copper, and computer chips. The Department of Commerce is investigating how these imports affect national security, and under a provision of the Trade Expansion Act of 1962, the president can impose tariffs if they are deemed necessary for national security.
This investigation will explore whether U.S. manufacturers can meet domestic demand for computer chips and examine the implications of relying on overseas production and assembly. The government is particularly concerned about the risks associated with having chip production concentrated in other countries and how foreign subsidies and unfair trade practices might undermine U.S. competitiveness.
Commerce Secretary Howard Lutnick elaborated that while electronics are not included in the new tariffs, specific sectors like pharmaceuticals and semiconductors will be subject to targeted tariffs. “These tariffs are non-negotiable,” he said. “We need to ensure that essential items for national security, like medicine and semiconductors, are produced here in America.”
On the topic of pharmaceuticals, it’s important to note that more than 70% of the active ingredients used in medications made in the U.S. come from abroad, with significant contributions from countries like India, the European Union, and China. Despite the U.S. being a major player in global pharmaceutical production, it consumes nearly half of the world’s supply.
In the semiconductor industry, while the U.S. does manufacture chips, it is heavily dependent on imports from countries like Taiwan and South Korea, especially for advanced chips. The Taiwanese company, for example, produces 92% of all advanced logic chips.
Last year, nearly $174 billion worth of electronics were imported from China, and it appears that these items will continue to face tariffs under existing policies as well as potentially new sector-specific charges.
In a separate action, the Commerce Department has decided to withdraw from a 2019 agreement regarding fresh tomato imports from Mexico, citing that the current setup does not adequately protect U.S. tomato growers from unfair pricing. As a result, tomatoes imported from Mexico will now be subject to a new tariff of 20.91%.
This move signals a robust effort by the Trump administration to reestablish American manufacturing capabilities and ensure national security through economic means.
