Summary
The President has issued two proclamations under Section 232 of the Trade Expansion Act addressing national security risks tied to U.S. dependence on foreign supply chains for (1) certain semiconductors and (2) processed critical minerals. One action imposes immediate tariffs; the other initiates negotiations with the possibility of future trade measures.
Semiconductors and Semiconductor Manufacturing Equipment
Immediate Tariffs Effective January 15, 2026
Following an investigation by the U.S. Department of Commerce, the Administration concluded that reliance on foreign semiconductor supply chains poses a national security risk. U.S. production currently meets only a small share of domestic demand.
Key Measures
- Tariff: 25% ad valorem duty on certain advanced computing chips and derivative products listed in the Annex.
- Effective Date: January 15, 2026.
- Exemptions: Tariff does not apply if chips are imported for qualifying uses, including U.S. data centers, U.S.-based R&D, repairs or replacements, startups, public sector use, non-data-center consumer or civil industrial applications, or other uses that strengthen U.S. technology supply chains (subject to Commerce determination).
- No Drawback: Duties paid are not eligible for duty drawback.
- Foreign Trade Zones: Covered products must enter FTZs in privileged foreign status and will be dutiable upon consumption entry.
- Future Review: Commerce will monitor imports and report by July 1, 2026. Tariffs may be modified following negotiations with key trading partners.
Importer Impact
- Increased landed costs for covered semiconductor articles unless an exemption applies.
- Heightened compliance expectations, including end-use certifications and accurate HTS classification.
- Strategic sourcing and U.S.-based activities may help mitigate exposure.
Processed Critical Minerals and Derivative Products
No Immediate Tariffs; Heightened Monitoring
A separate Section 232 investigation found that U.S. dependence on foreign processing of critical minerals presents a national security risk. The U.S. is fully import-reliant for several critical minerals and lacks sufficient domestic processing capacity.
Key Measures
- No Immediate Tariffs: No duties or import restrictions are imposed at this time.
- Negotiations: The Administration will engage foreign partners to reduce supply chain vulnerabilities.
- Future Actions Possible: If negotiations fail, measures may include import restrictions, minimum price mechanisms, or other trade remedies.
- Monitoring: Commerce will continue monitoring imports and report within 180 days.
Importer Impact
- No near-term duty changes, but increased scrutiny of critical mineral imports is expected.
- Importers should prepare for possible future restrictions or pricing measures.
- Supplier diversification and domestic processing partnerships may reduce risk.
Action Items for Importers
- Review exposure to covered semiconductor products effective January 15, 2026.
- Prepare documentation to support exemption claims where applicable.
- Monitor developments on critical minerals for potential future trade actions.
- Assess supply chains and sourcing strategies in light of heightened Section 232 enforcement.
Please reach out to your Buckland representative if you would like a product-specific impact review or assistance assessing exemption eligibility.