Trump Administration Opens Tariff Probes into Drug and Chip Imports over National Security Concerns

Trump Administration Opens Tariff Probes into Drug and Chip Imports over National Security Concerns

New Section 232 investigations target pharmaceutical and semiconductor products, raising fears of medicine shortages and tech supply chain disruptions.

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KEY FACTS

• What: National security investigations into drug and semiconductor imports

• Who: Initiated by the Trump administration

• When: Announced Monday; public comment period begins Wednesday

• Where: United States

• Why: To assess dependency on foreign supply and consider imposing tariffs

• How: Under Section 232 of the Trade Expansion Act of 1962

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SITUATION SNAPSHOT
As the U.S. sharpens its trade strategy, Washington has turned its spotlight on two critical industries: medicine and microchips. The Trump administration, citing national security, has launched formal investigations into pharmaceutical and semiconductor imports, potentially opening the door to sweeping new tariffs.

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WHAT WE KNOW
The latest move, revealed in notices posted to the Federal Register, signals the start of Section 232 probes into the importation of pharmaceuticals and semiconductors. These investigations, authorized by the Trade Expansion Act of 1962, allow the U.S. to impose tariffs if foreign imports are deemed a threat to national security.

The probes include not just finished products but also ingredients and related materials. A 21-day period for public comments will begin once the notices are formally published on Wednesday. Under statute, a final decision must be rendered within 270 days of the investigation’s launch.

The Trump administration has previously used Section 232 to justify tariffs on steel, aluminum, and automobiles. Now, the White House is taking aim at industries that were previously spared—pharmaceuticals and semiconductors.

Although a 10% blanket tariff on imports began on April 5, these two sectors remain exempt for now. However, President Donald Trump announced Sunday that a specific tariff on imported semiconductors will be revealed in the coming days, suggesting that changes are imminent.

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WHAT’S NEXT
The administration is expected to unveil the semiconductor tariff rate within a week. Public comment submissions will remain open for three weeks, after which the Commerce Department will proceed with its assessment. If findings support the need for tariffs, new duties could be implemented by year’s end.

Industry players are lobbying for a phased rollout to avoid market shocks. Meanwhile, damage assessments on healthcare costs and production delays are anticipated if tariffs go forward.

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VOICES ON THE GROUND
“Tariffs ‘will only amplify the problems that already exist in the U.S. market for affordable medicines,’” said John Murphy III, CEO of the Association for Accessible Medicines.

“Without substantive regulatory and reimbursement changes to the U.S. market, tariffs will exacerbate shortages that hinder patient access today.”

“Adding tariffs on America’s affordable medicine partners in India would make it even worse — for patients, the healthcare system and for America’s national security,” said Kathleen Jaeger, U.S. spokesperson for the Indian Pharmaceutical Alliance.

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CONTEXT
During his previous term, Trump refrained from targeting pharmaceuticals with tariffs. Now, he argues that overreliance on foreign suppliers, especially for essential drugs and microchips, is a liability that undermines U.S. sovereignty.

The Biden administration previously tried to mitigate this dependency by incentivizing domestic chip manufacturing through the CHIPS Act, aiming to reduce reliance on Taiwanese imports.

Generic drug makers, particularly from India—which accounts for nearly half of all U.S. prescriptions—say new tariffs would make it harder to keep prices low and supply steady. Some warn the duties could discourage investment in U.S.-based production.

While larger pharmaceutical firms can more easily absorb tariffs, industry experts caution that costs are likely to be passed on to patients.

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REPORTER INSIGHT
Behind the policy debate lies a growing unease about supply chain vulnerabilities exposed during the COVID-19 pandemic. As Trump pushes forward with his America First agenda, industries from healthcare to high tech brace for the financial and logistical fallout of reshoring essential manufacturing.