US set to act on chip imports, Trump hints at tariffs

The United States is set to announce the outcome of its national security investigation into semiconductor imports within the next two weeks, Commerce Secretary Howard Lutnick confirmed on Sunday. The probe, launched under Section 232 of the Trade Expansion Act, could pave the way for sweeping new tariffs on chip imports. The development came shortly after US President Donald Trump met European Commission President Ursula von der Leyen in Scotland, where the two leaders agreed to a new framework trade deal. The agreement includes a blanket 15 per cent tariff on all European Union imports entering the US and even higher duties for certain key sectors.

“Von der Leyen avoided the pending chip tariffs in a much better way,” Trump said, suggesting the new agreement may shield EU firms from the harshest semiconductor penalties.

Trade policy tool returns to centre stage

The chip probe is part of a broader Trump administration strategy that revives a controversial policy instrument — Section 232 — used extensively during his first term. The same provision had previously formed the basis for tariffs on steel, aluminium, and autos, citing national security risks. Now, semiconductors and pharmaceuticals are under scrutiny, with decisions likely to influence global tech supply chains.

According to Lutnick, the semiconductor investigation was a “key reason” the EU sought to accelerate broader trade negotiations with the US. The urgency stems from growing concerns in Europe over Washington’s protectionist stance, which has already unsettled auto and energy sectors.

Taiwan in the crosshairs

President Trump has long criticised America’s dependence on Taiwanese chips. While the Biden administration tried to fix this imbalance by offering billions in subsidies through the CHIPS and Science Act, Trump’s new approach appears tariff-driven.

He hinted that many companies, including some from Taiwan, are now planning investments in US chip manufacturing, potentially to sidestep incoming duties.

That could be a veiled reference to firms like TSMC, which recently expanded its Arizona facility, and Samsung, which secured a $16.5 billion contract to supply chips for Tesla via its Texas fab.

Section 232 probes expand

Besides chips and pharma, the Trump administration has launched Section 232 investigations into imports of copper and lumber. If past precedents are any guide, these could also result in tariff actions.

The latest probe comes just days before a fresh round of US tariff hikes takes effect on August 1. As per Trump’s April announcement, many large trading partners will soon face import duties well beyond the current 10 per cent baseline.

With chip supply chains already strained and global tech firms scrambling for foundry capacity, Washington’s next move could reshape the semiconductor trade map, again.

(With inputs from the agencies)