Monday, April 21, 2025

Even as implementation of the so-called “reciprocal” tariffs continues, the White House issued executive orders this week initiating so-called Section 232 investigations that may lead to additional duties on three key sectors. Tariffs issued in the year to date have raised the average applied U.S. tariff well above 20%, representing the largest tax increase in more than 50 years.

The proposed sectoral tariffs of global reach would be applied using authorities in the Trade Expansion Act of 1962 that examine whether imports “threaten to impair the national security.” With the investigations below, the Administration is setting the ball rolling in a process that could produce hefty tariffs on approximately $700 billion of imports — including many products not currently produced in the United States.

Chips and Stuff Made with Them: The Commerce Department on April 16 published a Federal Register Notice initiating its “investigation to determine the effects on the national security of imports of semiconductors and semiconductor manufacturing equipment (SME), and their derivative products.” The total scope of U.S. imports that could be affected is approximately $400 billion, covering a wide range of products from smartphones to computers and many other Information and Communications Technology (ICT) products. Comments are due May 7.

Pharmaceuticals and Their Precursors: In similar vein, the Commerce Department on April 16 published a Federal Register Notice initiating “an investigation to determine the effects on the national security of imports of pharmaceuticals and pharmaceutical ingredients, including finished drug products, medical countermeasures, critical inputs such as active pharmaceutical ingredients, and key starting materials, and derivative products of those items.” The total scope of U.S. imports that could be affected is approximately $250 billion. Comments are due May 7.

Processed Critical Minerals: While the Commerce Department’s notice seeking comment has not yet been published, the White House issued an executive order that will produce a similar Federal Register Notice tomorrow launching an investigation “to determine whether imports of processed critical minerals and their derivative products threaten to impair national security.” The total scope of U.S. imports that could be affected is approximately $50 billion. Comments will be due in early May.