Section 232 Semiconductors - American Global Strategies

April 16, 2025

Fred Fischer, Senior Vice President

AGS Section 232 Report

OVERVIEW

The Section 232 semiconductor investigation was initiated on April 1, 2025. A copy of the Federal Register notice of April 16, 2025 can be found here.
On April 15, 2025, the Bureau of Industry and Security in the Department of Commerce requested public comments on the investigation by May 7, 2025. Those comments can be found here.
The presumed product scope for the Section 232 investigation on semiconductors is based on Annex II of Executive Order 14257 of April 2, 2025 (90 FR 15041). The product scope was further expanded based on U.S. Customs and Border Protection Cargo Systems Messaging Service #64724565 of April 11, 2025.
While the statute provides for a 270-day investigation, we anticipate the investigation will likely be completed within 180-days – by September 28 – but could come sooner
The investigation originally covered semiconductors, but the scope was subsequently expanded to include a large array of derivative electronics incorporating semiconductors
The inclusion of $340 billion of imports of downstream electronics makes the investigation and remedy considerably more complicated, as most of the electronics are consumer-facing goods such as computers, tablets, and smart devices
Calculating the value of semiconductors in a wide variety of derivative electronics will be very challenging
The addition of derivative electronics likely extends the time needed for investigation and delays a remedy determination
Section 232 sectors, including semiconductors, will likely be part of reciprocal trade negotiations, and could result in country exceptions, preferential tariffs, tariff-rate quotas, or other preferential trade remedies

TRADE ANALYSIS

Semiconductors

The United States is a net exporter of semiconductors, with a $10.5 billion surplus in 2024
The United States exported $55.7 billion of semiconductors, with the largest markets being Mexico, China, and Malaysia
The United States imported $45.2 billion of semiconductors, with the largest sources being Taiwan, Malaysia, and Israel
The import share of Taiwan and Israel is increasing while the import share of Malaysia, China, and Vietnam is decreasing

Semiconductor Electronics

The United States is a net importer of electronics, with a $240.1 billion deficit in 2024
The United States exported $100.2 billion of electronics, with the largest markets being the EU, Mexico, and Canada
The United States imported $340.3 billion of electronics, with the largest sources being China, Taiwan, and Mexico
The import share of Taiwan, South Korea, and India is increasing while the import share of China, EU, and Japan is decreasing

BACKGROUND

Section 232 of the Trade Expansion Act of 1962 authorizes the president to adjust imports of goods or materials from other countries if the quantity or circumstances surrounding those imports are deemed to threaten national security
President Trump is utilizing Section 232 as one of the keystones of his trade and tariff policy
The Section 232 semiconductor investigation was initiated on April 1, 2025, and initially covered semiconductors. However, on April 11, 2025, the investigation was expanded to include semiconductor electronics (i.e., derivative products containing semiconductors).
20.4% of U.S. imports are currently subject to Section 232 tariffs on steel, steel derivatives, aluminum, aluminum derivatives, autos, and auto parts
25.6% of U.S. imports are currently under Section 232 investigations, including semiconductors
Assuming affirmative determinations in the seven pending Section 232 investigations, 46.0% of U.S. imports could be subject to Section 232 tariffs, tariff-rate quotas, or other trade remedies
Currently, approximately 25% of U.S. imports are exempted from reciprocal tariffs, with the product scope largely matching the pending Section 232 investigations
The seven Section 232 remedy investigations are expected to be completed within 180 days, which is considerably sooner than the statutory 270 days