Trump Announces Probes Into Chips and Drugs, Opening Door to Tariffs

Investigation Into Imports' Impact on US National Security Likely to Broaden Trade War

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WASHINGTON - US President Donald Trump's administration has pressed forward with plans to impose tariffs on semiconductor and pharmaceutical imports by initiating probes led by the Commerce Department.

The moves, announced on April 14 in the Federal Register, are a precursor to imposing tariffs, and threaten to broaden the President's sweeping US trade war.

The Commerce Department said it would be investigating the impact on US national security of "imports of semiconductors and semiconductor manufacturing equipment" as well as "pharmaceuticals and pharmaceutical ingredients, including finished drug products" in a pair of notices posted to the Federal Register.

The probes, which began on April 1 and were ordered under Section 232 of the Trade Expansion Act, could play out for months. Under the law, the Commerce Secretary is expected to deliver the results of his investigation within 270 days, though the Trump administration has signaled that these efforts could conclude faster.

Mr. Trump has long decried foreign production of drugs and chips as a threat to national security, and threatened to impose tariffs on imports in a bid to revive American manufacturing of those products. But the duties could also wreak havoc on supply chains and drive up costs for Americans.

New tariffs threaten to roil a chips industry that notched over US$600 billion (S$790 billion) in global sales of chips essential to products ranging from cars to airplanes and mobile phones to consumer electronics. Semiconductor supply chains still feeling the effect of disruptions caused by the Covid-19 pandemic could now face new strains from the US duties.