Tariffs Loom for Imports of Semiconductor and Pharmaceutical Products and Critical Minerals as Trump Administration Initiates National Security Probes

The Trump administration is pursuing additional national security investigations that will likely lead to tariffs on imports of semiconductors, semiconductor manufacturing equipment (“SME”), and derivative articles, pharmaceuticals and pharmaceutical ingredients and processed critical minerals.

Key points for companies that rely on imports of these types of merchandise include:

• Prepare for tariffs. For President Trump, this type of national security investigation has consistently led to tariffs.
• Industry engagement in the investigation processes could result in tariffs that are higher or lower than they otherwise would have been.
• Court challenges could lead to judicial invalidation of the tariffs.

The Investigations

National security investigations are conducted under the authority of Section 232 of the Trade Expansion Act of 1962 to determine the effect of imports of certain products on the national security of the United States. The Secretary of Commerce is to issue findings and recommendations to the President within 270 days of the initiation of a Section 232 national security investigation. If the President concurs with the Secretary of Commerce’s recommendations, he may take action, including the imposition of tariffs, within 90 days to mitigate the impact on national security of the imports in question.

The semiconductors and pharmaceutical investigations began on April 1 and must be completed by December 27, 2025, although there is a high likelihood that the investigations will be completed much sooner. At the conclusion of the investigations, President Trump is expected to impose so-called Section 232 tariffs on the goods covered by the investigations. As described in our prior alert, President Trump’s reciprocal tariffs would no longer apply to goods that become subject to Section 232 tariffs, to the extent such goods are not already excluded from those tariffs.

Commerce is seeking public comments or information pertinent to the semiconductor and pharmaceutical investigations by May 7, 2025.

President Trump issued Executive Order 14272 instructing Commerce to initiate a critical minerals national security investigation and to complete the investigation within 180 days (a much shorter-than-normal time frame for Section 232 investigations). Commerce is expected to commence the critical minerals investigation soon.

Investigations’ Scope

The semiconductors investigation covers:

• Semiconductors, including semiconductor substrates and bare wafers, legacy chips, leading-edge chips and microelectronics;
• SME, including components for such equipment; and
• Derivative products of the above items, including downstream products containing semiconductors and making up the electronics supply chain.

The pharmaceuticals investigation covers:

• Pharmaceuticals, including finished generic and non-generic drug products and medical countermeasures;
• Pharmaceutical ingredients, including active pharmaceutical ingredients and key starting materials; and
• Derivative products of the above items.

Once initiated, the critical minerals investigation is expected to cover:

• Critical minerals that have undergone the activities that occur after critical mineral ore is extracted from a mine up through its conversion into a metal, metal powder or a master alloy; and
• All goods that incorporate processed critical minerals as inputs, including both semi-finished goods (such as semiconductor wafers, anodes, and cathodes) and final products (such as permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components, and advanced optical devices).

Other National Security Investigations

Other Section 232 national security investigations initiated by President Trump resulted or are expected to result in the imposition of tariffs:

Copper, timber and lumber (and their derivatives): On March 10, 2025, Commerce initiated two investigations related to the imports of copper in all forms and its derivative products and imports of timber, lumber, and their derivative products. Findings are due to the President by December 5, 2025. President Trump is expected to impose Section 232 tariffs on most, if not all, of the goods covered by the investigations.

Steel, aluminum, and automobile parts: During the first Trump administration, Commerce completed investigations of steel and aluminum products imports in 2017 and of automobiles and automobile parts imports in 2019.

• The steel and aluminum investigation resulted in the imposition by President Trump of a 25 percent tariff on imports of various steel products and a 10 percent tariff on imports of various aluminum products, with exemptions for Canada and Mexico. On March 12, 2025, President Trump expanded and extended Section 232 tariffs on steel and aluminum products, as discussed in our prior alert.
• President Trump did not impose any automobile and auto parts import measures in 2019. However, Presidential Proclamation 10908 dated March 26, 2025 referenced the 2019 investigation and imposed a 25 percent tariff on automobiles effective April 3, 2025 and on various automobile parts effective May 3, 2025, with special tariff treatment for automobiles qualifying for preferential tariff treatment under the United States-Mexico-Canada Agreement.

Possible Court Challenges

The proposition that U.S. national security is threatened by imports in so many sectors seems difficult to reconcile with decades of minimal or no action under Section 232. The courts did reject a challenge to Section 232 tariffs on imports of steel products in 2022. But given the unprecedented breadth of action under Section 232 in the Trump II administration, additional court challenges seem likely.

What Companies Can Do

• Participate in the public comment process by the May 7, 2025 deadline.
• Evaluate supply chains to identify dependencies on the imports of products covered by the new investigations.
• Proactively identify strategies to ensure compliance with potential Section 232 tariffs. Stay informed about changes in trade policies and adjust operations accordingly.
• Monitor progress of the investigations and potential tariff impositions with a view to adjusting strategies promptly in response to new information.