US Takes Bold Steps on Tariffs: Investigating Computer Chips and Pharmaceuticals for Economic Impact

BANGKOK (AP) — The Trump administration is taking new steps to impose more tariffs on key imports. They’ve just launched investigations into computer chips, chip-making equipment, and pharmaceuticals.

The Department of Commerce recently posted notices about these investigations in the Federal Register. They’re asking the public for comments over the next three weeks. While President Trump paused most major tariff hikes last week, he still plans to target pharmaceuticals, lumber, copper, and computer chips.

The Commerce Department’s investigation will look into how imports of computer chips and related products impact national security. This includes evaluating whether the U.S. can produce enough chips to meet domestic needs and the role of foreign manufacturing in that supply.

One significant concern is the concentration of chip production in certain countries. For example, Taiwan is responsible for a staggering 92% of the advanced logic chip fabrication capacity, according to the International Trade Administration. This reliance on foreign manufacturing poses risks to the U.S. economy and national security.

In a recent interview, Commerce Secretary Howard Lutnick emphasized that certain tariffs, especially on pharmaceuticals and semiconductors, are not open for negotiation. He stated the goal is to ensure that vital products are made in the U.S., including medicines and chips.

Interestingly, more than 70% of the active ingredients used in U.S. pharmaceuticals come from abroad, primarily from India, the European Union, and China. The U.S. produces about 20% of the world’s pharmaceuticals but consumes around 45%. This heavy reliance on foreign suppliers raises concerns about the country’s ability to manage its pharmaceutical supply chain effectively.

As for computer chips, the U.S. does manufacture them, but it still depends heavily on imports from places like Taiwan and South Korea for advanced types. Last year, products such as laptops and smartphones accounted for nearly $174 billion in U.S. imports from China. The administration’s plans suggest continued taxation on these electronics, likely under both existing tariffs and additional sector-specific levies.

Major chipmakers like Taiwan Semiconductor Manufacturing Corp. are investing significantly in U.S. manufacturing facilities, thanks partly to incentives from the Biden administration. However, changing supply chains and building new facilities will take time and money, making it a challenging process.

In a separate development, the Commerce Department has announced it will withdraw from a 2019 agreement regarding fresh tomato imports from Mexico. This decision comes after concerns that the previous arrangement did not adequately protect U.S. growers from unfair pricing. As a result, many tomatoes from Mexico will soon face a hefty 20.91% tariff.

In summary, as the U.S. looks to strengthen its supply chains and reduce dependency on foreign imports, these investigations and potential tariffs reflect a broader strategy to bolster national security and domestic production capabilities.

Check out this related article: Marjorie Taylor Greene Capitalizes on Market Dip Before Trump’s Tariff Pause—Here’s How She Profited

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