The U.S. Department of Commerce (DOC) has launched two national security investigations under Section 232 of the Trade Expansion Act of 1962 to assess whether imported semiconductors and pharmaceutical goods pose risks to the United States’ security and its industrial base. These investigations may result in future trade actions, including targeted tariffs or other policy measures.
SEMICONDUCTOR AND PHARMACEUTICAL IMPORTS: SCOPE OF THE SECTION 232 INVESTIGATIONS
According to two unpublished Federal Register notices scheduled for official publication on April 16, 2025, the Department’s Bureau of Industry and Security (BIS) is examining imports of semiconductors, semiconductor manufacturing equipment (SME), and associated downstream products such as chips embedded in electronics and industrial systems​.
The pharmaceutical investigation includes finished drug products, active pharmaceutical ingredients (APIs), medical countermeasures, key starting materials, and other critical pharmaceutical components​.
The Department’s Bureau of Industry and Security requests public comments to support its assessments. Comments must be submitted before May 7, 2025, at www.regulations.gov under docket numbers BIS-2025-0021 (semiconductors) and BIS-2025-0022 (pharmaceuticals).
SEMICONDUCTORS AND PHARMACEUTICALS REVIEW AREAS: DOMESTIC CAPACITY, SUPPLY CHAIN CONCENTRATION, AND TRADE PRACTICES
The DOC will examine how U.S. production can meet national demand for semiconductors and pharmaceuticals. It will also evaluate supply chain dependencies, the geographic concentration of foreign suppliers, and the feasibility of reshoring production capacity.
Additional review areas outlined in the unpublished notices include:
- Current and projected U.S. demand for semiconductor and pharmaceutical products
- Domestic capacity by product category, manufacturing capability, and workforce availability
- Foreign government policies or practices that may skew competition or suppress prices
- The role of subsidies, overcapacity, and supply chain control by non-U.S. entities
- Potential for export restrictions or geopolitical disruptions
- Trade policy gaps and whether additional tools—such as tariffs or quotas—may be warranted
Findings from the Section 232 semiconductor and pharmaceutical investigations are expected later in 2025.
SEMICONDUCTORS AND PHARMACEUTICALS UNDER SEPARATE POLICY TRACK FROM RECIPROCAL TARIFFS
Although semiconductors and pharmaceuticals were excluded from the April 2 reciprocal tariffs, they are now undergoing a separate but related policy review. Any policy outcomes—including potential tariffs—are expected to be separate from reciprocal duties, allowing for more focused responses to sector-specific risks.
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