Trump’s Bold New Tariffs on Computer Chips and Drugs Spark Market Concerns

On Monday, the Trump administration took significant action that hints at new tariffs on semiconductors and pharmaceuticals, factors President Trump indicates are crucial for national security and economic stability. The federal government has initiated investigations concerning the imports of chips, pharmaceutical ingredients, and the machinery required for semiconductor production. According to Kush Desai, a White House spokesman, the move aligns with Trump’s ongoing mission to reshore essential manufacturing.

Under Section 232 of the Trade Expansion Act of 1962, these tariffs would broaden the existing situations where the U.S. has imposed levies, including substantial ones on steel and autos. With semiconductors vital for various industries—from electronics to automotive—the U.S. has noted a troubling dependency on Asian imports, which both parties in Congress have labeled a security risk.

Trump has also expressed flexibility regarding potential exemptions for certain manufacturers, aiming to support companies transitioning to domestic production. Amid this, notable tech firms like Taiwan Semiconductor Manufacturing Company and Nvidia have pledged billions towards expanding production in the U.S. Nevertheless, experts urge a comprehensive strategy—beyond tariffs alone—to revitalize domestic chip-making amid competition from heavily subsidized foreign markets.