On March 14 local time, the Trump administration announced that it had initiated "Section 232 investigations" into semiconductors and pharmaceuticals.
Two notices in the Federal Register show that the U.S. Department of Commerce started the above-mentioned investigations as of April 1. Currently, it has begun to investigate the impact of imports of "semiconductors and semiconductor manufacturing equipment" and "pharmaceuticals, pharmaceutical ingredients, including finished pharmaceutical products" on U.S. national security.
A "Section 232 investigation" refers to an investigation initiated by the U.S. Department of Commerce under the authorization of Section 232 of the Trade Expansion Act of 1962 to determine whether the import of specific products poses a threat to U.S. national security. Usually, the Secretary of Commerce will announce the investigation results within 270 days.
The U.S. Department of Commerce has announced that the scope of this "Section 232 investigation" includes, but is not limited to, semiconductor substrates and bare wafers, traditional chips, cutting-edge chips, microelectronic products, and components for small and medium-sized enterprises. Meanwhile, derivative products include downstream products containing semiconductors, such as products that make up the electronic supply chain. The U.S. Department of Commerce is currently conducting a 21-day public comment period.
Another separate "Section 232 investigation" related to pharmaceuticals will review the import situation of all pharmaceuticals, including generic drugs and non-generic drugs, as well as the ingredients used to manufacture these drugs. If such tariffs are imposed, it will deal a blow to global pharmaceutical giants, including Merck & Co., Inc. and Eli Lilly and Company, which have dozens of production bases around the world.
Experts have confirmed that the usual process of a "Section 232 investigation" takes about nine months, and then the president has about three months to make a decision.
However, according to previous reports, U.S. Secretary of Commerce has stated that semiconductor tariffs may be introduced within one or two months.