William Gallagher
To somehow support claims that the tariff exemption is not an exemption at all, the White House has announced an investigation into the entire semiconductor market segment.
On April 2, 2025, Trump announced his "Liberation Day" slew of tariffs for which there would be no exemptions. On April 9, he granted Apple an exemption.
But following the worldwide recognition that this was an exemption, over the weekend of April 10 and 11, Trump proclaimed that it was nothing of the sort. He said "there was no Tariff 'exception'... they are just moving to a different Tariff 'bucket'," as if it were all part of the plan.
At the same time, Trump did also promise to launch a national security trade investigation into the "whole electronics supply chain." Now according to CNBC, the White House has announced exactly that.
Except it hasn't, not exactly. The announcement is in a document on the Federal Register that can be read, but officially will not be published until April 16. In it, the White House claims that:
On April 1, 2025, the Secretary of Commerce initiated an investigation under section 232 of the Trade Expansion Act (19 U.S.C. 1862) to determine the effects on national security of imports of semiconductors, semiconductor manufacturing equipment, and their derivative products. This includes, among other things, semiconductor substrates and bare wafers, legacy chips, leading-edge chips, microelectronics, and SME components.
It's not clear why an investigation begun on April 1 would not be announced until April 15, and not officially enacted until April 16. Nor how it can have been started before the "reciprocal" tariffs were announced, but then itself be announced after the tariffs were reversed with the Apple exemption.
Nor is it clear why technology firms were hit with the "reciprocal" tariffs if it were already planned that they would come under the different "bucket" of semiconductor tariffs.
Nonetheless, the filing is very clear that the government is seeking submissions from interested parties. They must submit comments "no later than [INSERT DATE 21 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER]."
The investigation wants to determine the current and projected semiconductor demand in the US, plus to what degree local production can meet that. The filing then has some vaguely-worded clauses about "the role of foreign fabrication... in meeting US demand," and the "concentration of United States imports... and the associated risks."
There are many other issues listed in the filing, but they all come down to what the US needs and what the US can make itself.
But the key part is number 9 in a series of 14 points. It says the investigation concerns "the impact of current trade and other policies on domestic semiconductor and SME production and capacity, and whether additional measures, including tariffs or quotas, are necessary to protect national security."
It's wrong to assume the outcome of any investigation, but in "21 DAYS AFTER DATE OF PUBLICATION IN THE FEDERAL REGISTER," technology businesses can expect tariffs and perhaps quotas. That's not an educated guess: commerce secretary Howard Lutnick has already prejudged the investigation and said that semiconductor tariffs will be coming.
Maybe it's necessary, maybe there are security risks. And so nothing deters foreign spies like making US businesses and consumers pay more for the privilege of being spied on.
Note that Lutnick said the semiconductor tariffs would be "coming in probably a month or two." Trump has now said they would come next week, according to BBC News.
April 1, April 16, next week, a month or two, no exemptions, Apple exemptions, again no exemptions, there is no plan to this. Which means despite the markets rising at the news of Apple exemptions, they are going to continue to be volatile for at least weeks longer.
And, regardless, the 10% tariffs to somehow stop the fentanyl trade are still in place for these goods. This is still more than was being applied before the first shot was fired in the trade war almost two weeks ago.
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15 Comments
Stop making so much sense! :D
Theodore Roosevelt famously said “Walk softly and carry a big stick”. Trump only knows the stick. He only knows how to threaten and bully.
Remember when you were a kid, how there was that one other kid that nobody wanted to play with because they always hit? Trump is that kid. He doesn’t ever use diplomacy. He doesn’t try to negotiate. It’s always do this Or Else. He and the US are going to find that a lot of companies are going to choose the Or Else and walk away. The US is going to go from having the semiconductors it needs for home, industry, and defence, albeit some from questionable sources, to a lot of those simply not being available. While the CHIPS act was making progress on bringing semiconductor manufacturing to US shores, that is in the process of being killed. These threats on the other hand will have the opposite effect. More companies, prodded by these tactics, and governments around the world that don’t have the US’s best interests at heart, will be walking away.
The US is no longer in a position to bully and threaten the world. The world has grown and the US is now only a part of it. Trying to demand things from the rest of the world, use tariffs, and threats to get what it wants, will not work, and will backfire making the US poorer, more alone, and weaker. They put the US at a great disadvantage compared to the rest of the world. They also will make countries like China stronger and more trusted as they prove to be the more reliable partner.
As has become increasingly evident, the world is growing less and less tolerant of bullies.
The Trump administration tries to claim everything is an emergency or national security related. But they never like to provide any evidence of either claim.
Or, you know, the probe is for what they say it’s for.