US President Trump pledges national security probe into semiconductors, signaling potential new tariffs on Chinese electronics and tech products, with a focus on manufacturing in America.
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| Trump’s administration sets sights on national security investigation of semiconductors, likely introducing new tariffs on tech imports, especially from China, amid global trade uncertainty. Image: CH |
Washington D.C., USA — April 14, 2025:
In a bold escalation of his trade war with China, US President Donald Trump announced on Sunday that his administration will soon launch a national security investigation into the semiconductor sector, with the potential for new tariffs on Chinese electronics. The move follows the recent exemption of smartphones, computers, and other tech products from the steep reciprocal tariffs on China, which many believed would provide a temporary reprieve to tech companies like Apple and Dell Technologies.
Trump’s latest remarks indicate that these exclusions could be short-lived. In a post on social media, the President confirmed that key electronics, including semiconductors, will now be scrutinized under national security provisions, with tariffs expected in the near future. “We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations,” Trump said.
The administration’s stance was further articulated by Secretary of Commerce Howard Lutnick, who suggested that critical technology products from China would soon face "a special focus-type tariff," targeting semiconductors, smartphones, computers, and pharmaceuticals. These products, once excluded from reciprocal tariffs, will likely fall under the purview of these new duties within the next two months. The goal, according to Lutnick, is to ensure that the United States is no longer reliant on foreign sources for these vital technologies, which are considered crucial for national security.
The new tariffs, if enacted, would aim to drive production back to American soil, particularly for sectors like semiconductors, which are integral to national defense, telecommunications, and other strategic industries. Trump's administration has been vocal about its desire to reduce dependence on China for these critical components, and the semiconductor probe is expected to become a key part of his broader trade strategy.
The exclusion of electronics from Trump's 125% reciprocal tariffs last week was a significant win for major US tech companies that rely heavily on Chinese imports. Apple, for instance, sources about 80% of its iPhones from China. But with the new national security investigation in play, tech firms are left grappling with an uncertain future. Trump’s back-and-forth tariff policies have created massive volatility in global markets, triggering some of the biggest market swings since the COVID-19 pandemic in 2020.
The benchmark S&P 500 index has dropped more than 10% since Trump took office, a reflection of the uncertainty surrounding his trade policies. As Trump’s administration doubles down on tariffs and security concerns, tech companies, especially those with heavy exposure to China, are left to assess the long-term consequences of his aggressive stance on trade.
In response to Trump’s escalating tariffs, China has retaliated by raising its own duties on US imports to 125%, further escalating trade tensions. China's Ministry of Commerce expressed frustration over the US's actions, indicating that it is carefully evaluating the impact of the exclusions on US tech products. Beijing’s statement, "The bell on a tiger's neck can only be untied by the person who tied it," highlights the complexity of the situation and the difficulty in reversing the ongoing tariff war.
The new wave of tariffs and the investigation into semiconductors has prompted concerns from both sides of the political aisle in the United States. Democratic Senator Elizabeth Warren called the latest tariff revision “chaotic,” arguing that the unpredictable nature of the policies is damaging to the US economy and its global trade relationships.
Billionaire investor Bill Ackman, known for his support of Trump’s presidential run, has expressed concern over the potential negative impacts of continued tariff escalation. Ackman suggested that Trump should temporarily pause tariffs on China for 90 days, similar to his approach with other countries, to allow US businesses time to adjust their supply chains without the constant disruption of new tariffs.
Investor sentiment remains volatile, with many expressing frustration over the lack of clarity in the administration’s messaging. Sven Henrich, founder of NorthmanTrader, criticized the Trump administration's approach, saying that US businesses are struggling to plan and invest amid the constant policy shifts. The lack of a coherent tariff strategy has left markets on edge, with analysts warning that prolonged uncertainty could push the US closer to a recession.
As the national security investigations into semiconductors and electronics unfold, the future of US-China trade relations remains uncertain. The potential for further tariffs on critical tech products like semiconductors could significantly alter global supply chains, particularly in the technology sector. For now, tech companies and investors are left to navigate a landscape marked by unpredictable tariff policies, trade frictions, and ongoing geopolitical tensions.
Trump’s tariff strategy, while aiming to bolster US manufacturing, has raised serious concerns about the long-term impact on the global economy. As US companies work to diversify their supply chains and mitigate risks associated with China, the next few months will be crucial in determining whether this trade war will result in the reshoring of critical manufacturing or lead to further economic instability.