The Trump Administration intends to terminate duty exemptions for tech products and initiate a national security probe pursuant to Section 232.

Taiwan • Business • 04/14 01:07
The Trump Administration intends to terminate duty exemptions for tech products and initiate a national security probe pursuant to Section 232.

On April 14, 2025, President Trump of the United States announced the imposition of specific tariffs on 20 technology products, including smartphones, laptops, and semiconductor chips, even though these products were recently added to a temporary tariff exemption list. U.S. Commerce Secretary Lutnick and White House economic advisor Hassett confirmed that these products will be designated as critical to national security and may face new tariffs within one to two months. The Trump administration plans to conduct a national security trade investigation under Section 232 of the Trade Expansion Act to ensure the independence and security of the U.S. technology supply chain.

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The United States announced the phased implementation of tariffs on electronic products and semiconductors, starting in 2025.

In April 2025, the U.S. government announced a two-step adjustment to the tariff policy for electronic products and the semiconductor industry. President Trump announced that the first step would temporarily exempt certain electronic products from high reciprocal tariffs on certain electronic products, and the second step is expected to implement exclusive tariffs specifically on semiconductors and related products within one to two months. This policy adjustment aims to promote the reshoring of industries and emphasizes considerations of national security. The exemption list, which includes computers and smartphones, significantly impacts companies like Apple and TSMC. A national security investigation may be initiated in the future to further adjust the tariff measures.

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04/14 01:07

The Trump Administration intends to terminate duty exemptions for tech products and initiate a national security probe pursuant to Section 232.

On April 14, 2025, President Trump of the United States announced the imposition of specific tariffs on 20 technology products, including smartphones, laptops, and semiconductor chips, even though these products were recently added to a temporary tariff exemption list. U.S. Commerce Secretary Lutnick and White House economic advisor Hassett confirmed that these products will be designated as critical to national security and may face new tariffs within one to two months. The Trump administration plans to conduct a national security trade investigation under Section 232 of the Trade Expansion Act to ensure the independence and security of the U.S. technology supply chain.

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US-China Tariff War Intensifies: Trump's Policy Drives Up US Bond Yields, Taiwan's Semiconductor Industry Benefits from Rush Order Effect

President Trump of the United States announced a 145% tariff on Chinese goods and imposed a 10% reciprocal tariff on several countries, leading to an escalation in the U.S.-China trade war and causing turbulence in global markets. The yield on the U.S. 10-year Treasury bond surged to 4.59%, reaching a new high for 2023. Despite uncertainties facing the tech industry, strong demand for AI is prompting American cloud service providers to speed up their orders, benefiting Taiwan's semiconductor supply chain with a wave of urgent orders. Companies such as TSMC are benefiting, and air freight space is fully booked.

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Trump's Fluctuating Tariff Policy: Electronics Subject to Separate Tariffs, U.S. Postpones Tariffs on 75 Countries for 90 Days

In early April 2025, President Trump of the United States announced the implementation of "reciprocal tariffs" on multiple countries. Subsequently, on April 11, he released a list of 20 electronic products exempt from tariffs. However, Trump denied the existence of this policy, calling it "fake news," and planned to impose "semiconductor tariffs" on these products. Meanwhile, the U.S. temporarily postponed the imposition of reciprocal tariffs on 75 countries for 90 days. This policy repeatedly triggered market fluctuations, and experts warned that investment risks in Taiwan's stock market have increased.

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In 2025, the US-China trade war heats up: Trump's tariff policy impacts the global tech supply chain, TSMC sees a sudden surge in urgent orders, and France proposes European Union border quotas.

In April 2025, the US-China trade war intensified as President Trump imposed tariffs as high as 145% on Chinese goods, and China retaliated by imposing a 125% tariff on American goods. The Trump administration temporarily exempted electronic products like smartphones from tariffs, but the semiconductor industry remained affected. TSMC received urgent orders from American clients, which accelerated the construction of its US plant. The French Finance Minister suggested that the EU set up border quotas to prevent a flood of cheap Chinese goods. After some fluctuations, the Taiwan stock market showed four major bullish signals, and market sentiment stabilized.

04/13 19:07

Taiwan Semiconductor Manufacturing Company (TSMC) invests $165 billion to speed up the construction of its wafer plant in Arizona, United States, to address potential US semiconductor tariffs.

TSMC is accelerating the construction of its third-phase semiconductor fabrication plant in Arizona in response to the potential imposition of tariffs on semiconductor products by the United States, increasing the total investment to $165 billion and advancing the groundbreaking to June 2025. U.S. Secretary of Commerce Lutnik stated that individual tariffs on semiconductor products are expected to be imposed within one to two months to encourage manufacturing to return to the U.S., prompting heightened alert and responsive measures within the industry.

Exemptions Are Temporary, Trump Announces New Tariffs Coming Soon

On April 11, 2025, the U.S. Customs and Border Protection (CBP) released a list of tariff exemptions covering 20 products, including smartphones, laptops, memory chips, semiconductor manufacturing equipment, and flat-panel displays. This exemption was initially seen as a significant concession by the Trump administration to the tech industry, offering a temporary reprieve for companies such as Apple, Dell, and TSMC that depend on Chinese manufacturing.

However, Trump promptly informed the media aboard Air Force One that these exemptions are merely "procedural steps" and not permanent policies. He emphasized, "No country can evade the tariffs we've imposed to address unfair trade deficits, particularly China." Trump noted that these products are merely shifting from the "reciprocal tariffs" category to the "national security tariffs" category and will still face targeted taxation in the future.

Semiconductors and Electronics to Fall Under "Separate Tariffs" Category

U.S. Commerce Secretary Howard Lutnick stated in an interview on ABC's "This Week" on April 13 that smartphones, laptops, and other electronic products will be classified as "national security critical products" along with semiconductors and will be subject to "separate tariffs" in about one to two months. He noted, "These products will fall under the semiconductor category, and there will be specific tariffs targeting this category to ensure these products return to domestic production."

Lutnick further explained that these tariff measures will no longer belong to the reciprocal tariff system but will shift to a tax system based on national security. He stressed, "We can no longer depend on China for the essential goods we require."

National Security Trade Investigation Initiated, Section 232 as Policy Basis

The proposed tariff measures by the Trump administration will be conducted under Section 232 of the Trade Expansion Act of 1962. This section authorizes the U.S. President to take actions, including imposing tariffs, setting quotas, or other non-trade measures, once the Department of Commerce determines that imported products threaten national security.

White House economic advisor Kevin Hassett noted that the Trump administration has initiated a Section 232 investigation into semiconductors and the overall electronics supply chain, with a report to be submitted within 270 days. He stated, "These products are crucial to our defense system, especially with semiconductors containing too many Chinese components, which is a national security issue."

Hassett compared this move to the 25% tariffs imposed by Trump on steel and aluminum products in 2018, which were also conducted under Section 232.

Exemption List and "American Value" Condition

According to the CBP announcement, the 20 temporarily exempted products include smartphones, laptops, hard drives, data processing equipment, memory chips, semiconductor equipment, and flat-panel displays. These exemptions took effect at 12:01 AM on April 5 and apply retroactively.

However, both Lutnick and U.S. Trade Representative Greer pointed out that these exemptions are only transitional arrangements and will transition into a new tariff system in the future. Greer stated, "It's not that they won't be taxed, but they will belong to a different system."

Additionally, the Trump administration mentioned a "20% American value" condition, meaning if more than 20% of a product's value comes from the U.S., it can receive tax-free treatment. However, the calculation method for "American value" has not yet been clearly defined, drawing industry attention.

China as Main Target, Supply Chain Restructuring Pressure Increases

Trump has repeatedly singled out China on social media, labeling it as "America's worst trade partner" and emphasizing "no one can escape responsibility." According to U.S. Census Bureau data, the most imported products from China to the U.S. in 2024 were smartphones ($41.7 billion) and laptops ($33.1 billion), indicating China's critical position in the U.S. tech supply chain.

Trump administration spokesperson Karoline Leavitt stated that Trump has instructed companies like Apple, Nvidia, and TSMC to accelerate moving their manufacturing operations back to the U.S. Lutnick also mentioned that millions of American workers will be involved in producing products like iPhones in the future.

Industry Reaction and Future Directions

Although the exemption measures temporarily provide breathing space for tech companies, the industry is generally apprehensive about future policy directions. John Mitchell, president of the U.S. Electronics Industry Association (IPC), stated, "These exemptions help avoid supply disruptions, control costs, and support U.S. investment in advanced technology."

However, the Trump administration has made it clear that future tariff measures will not be open to negotiation and will focus on national security. The U.S. government is expected to publish a notice related to semiconductors in the Federal Register this week, officially initiating the Section 232 investigation process.

References

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Why did the Trump administration choose to impose specific tariffs on technology products under Section 232? What impact does this have on the supply chain in the United States?