Trump Initiates Chips and Drug Probes Ahead of More Tariffs

Key Points

  • The Trump administration is initiating trade probes on semiconductor and pharmaceutical imports, potentially leading to tariffs.
  • The Commerce Department is investigating the national security implications of these imports under Section 232 of the Trade Expansion Act.
  • The probes could disrupt global supply chains, increase costs for American consumers, and affect industries like tech and pharmaceuticals.
  • The semiconductor investigation covers both legacy and advanced chips, impacting companies like Taiwan Semiconductor and ASML.
  • Pharmaceutical companies might face higher costs, potentially leading to reduced R&D or increased drug prices in the U.S.

Summary

The Trump administration has launched trade probes into the importation of semiconductors and pharmaceuticals, signaling potential new tariffs that could expand the U.S. trade war. These investigations, announced in the Federal Register, are examining the national security implications of these imports under Section 232 of the Trade Expansion Act. The probes could last for months, with outcomes expected within 270 days, though they might conclude sooner. The semiconductor industry, already strained by global supply chain issues post-Covid, faces further disruption, potentially affecting tech giants like Apple and Nvidia. Similarly, the pharmaceutical sector, with companies like Eli Lilly and Merck, might see increased costs, which could lead to higher drug prices or reduced research and development. The moves come after a brief exemption from tariffs for certain tech products, but the administration has indicated that this relief is temporary. The investigations could have significant implications for global trade, domestic manufacturing, and consumer prices in the U.S.

yahoo
April 15, 2025
Stocks
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