The Department of Commerce is initiating investigations into “semiconductors and semiconductor manufacturing equipment (SME), and their derivative products” [source] and into “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” [source].
Like steel, aluminum, and automobile and automobile part tariffs, these are brought under Section 232 of the Trade Expansion Act of 1962 and can result in additional tariffs on these products. We previously wrote about the potential for increased tariffs when discussing the Section 232 copper investigation. The comment period is open until May 7.
What Section 232 Investigations Actually Mean
Section 232 investigations are distinct from the IEEPA-based reciprocal tariffs that have dominated trade headlines in 2025. Where IEEPA tariffs are imposed rapidly through executive order, Section 232 involves a formal process: the Bureau of Industry and Security (BIS) conducts a national security investigation, accepts public comments, and submits a report to the President within 270 days. The President then has 90 days to act on the report’s recommendations. The Trump administration has been moving considerably faster than the statutory maximum — the copper Section 232 investigation was completed and resulted in tariffs within 144 days of initiation.
Critically, Section 232 tariffs operate differently from the reciprocal tariffs. The anti-stacking executive order issued April 29, 2025 addressed overlapping tariffs for certain categories — but if Section 232 tariffs are imposed on pharmaceuticals or semiconductors, they could stack on top of existing Section 301 China tariffs, since Section 301 is a separate statutory framework not covered by the anti-stacking order. Importers of Chinese-origin semiconductors in particular should be aware of this potential compounding exposure.
Both investigations were also exempted from the April 2 reciprocal tariff regime — semiconductors and pharmaceuticals were carved out of the Liberation Day tariffs precisely because the administration intended to address them separately through Section 232. Those exemptions from the reciprocal tariffs remain in place, but Section 232 tariffs on the same products are now being developed on a parallel track.
Semiconductors: Update — January 14, 2026
On January 14, 2026, President Trump issued a Presidential Proclamation acting on the semiconductor Section 232 investigation. BIS submitted its report to the President on December 22, 2025, finding that semiconductors, semiconductor manufacturing equipment, and their derivative products are being imported in quantities and under circumstances that threaten to impair national security.
The resulting tariff is narrower than many had anticipated. The proclamation imposes a 25% Section 232 tariff on a targeted set of advanced semiconductors and products containing those semiconductors that are not intended for use in the United States, effective January 15, 2026. The scope is limited — it does not sweep in the full range of downstream electronics that contain semiconductors, which had been a major concern for the consumer electronics and technology industries.
The proclamation also directs USTR to pursue negotiations with relevant foreign jurisdictions to address the national security concerns identified in the investigation. Depending on negotiation outcomes, the administration has signaled it may consider higher tariffs on a broader range of semiconductor products. Several U.S. trade agreements — including those with the EU, Japan, and South Korea — include commitments that those countries’ semiconductor exports will receive treatment no less favorable than any other trade partner under future Section 232 semiconductor actions.
Pharmaceuticals: Investigation Ongoing
As of early 2026, no pharmaceutical Section 232 tariff has been formally imposed. The investigation is ongoing. However, the administration has been actively using the threat of tariffs as leverage in direct negotiations with the pharmaceutical industry. Major pharmaceutical companies including Novo Nordisk, Eli Lilly, and EMD Serono have separately announced agreements with the Trump administration to offer lower drug prices in the U.S. and expand domestic manufacturing, in exchange for relief from potential future tariffs.
On the trade agreement side, pharmaceutical imports from the EU and Japan are expected to face a maximum 15% tariff rate under those countries’ framework agreements with the U.S. — a significant concession that effectively sets a tariff ceiling for those trading partners if and when pharmaceutical Section 232 tariffs are formally implemented. The pharmaceutical investigation covers a broad scope: finished drug products, active pharmaceutical ingredients (APIs), key starting materials, medical countermeasures, and derivative products — meaning the tariff, if implemented, could affect the entire pharmaceutical supply chain, not just finished medicines.
Tariff Questions?
Do you have questions about Section 232 investigations and how they may affect your products? Great Lakes Customs Law has been advising importers for more than 15 years. Call us at (734) 855-4999, send a text message, or reach us on WhatsApp.