The Continued Utilization of Tariffs to Control the Semiconductor Industry

By Brett W. Johnson, T. Troy Galan, and Thomas Williams

Following an investigation by the U.S. Secretary of Commerce, President Trump issued a presidential proclamation (the Proclamation) pursuant to Section 232 of the Trade Expansion Act of 1962,¹ imposing an additional 25% ad valorem tariff on certain imports of semiconductors, semiconductor manufacturing, and derivative products, beginning January 15, 2026.²

This development underscores that even outside of the International Emergency Economic Powers Act (IEEPA), the statute invoked to implement the Reciprocal Tariffs, the President retains other statutory authorities to impose tariffs. Importers should therefore not pause tariff-mitigation strategies while awaiting the U.S. Supreme Court’s decision in Learning Resources, Inc. v. Trump.

In addition, as U.S. Customs and Border Protection (CBP) continues to increase enforcement, importers should be aware of the importance of well-documented, supportable claims when relying on the end-use exemptions provided in the Proclamation. Strong documentation mitigates the risk of exposure to violations and may simplify CBP audits that may occur even where the importer has acted in full compliance.

Two Phases of the Proclamation

The Proclamation imposes a two-phase plan of action to address the import of semiconductors and derivative products so that they do not impair U.S. national security interests.

First, the Proclamation imposes an immediate 25% ad valorem tariff on specified “advanced computing chips” and certain derivatives when the importation does not contribute to U.S. technology supply chain buildout or domestic manufacturing capacity.³ While this is ongoing, the United States will continue to engage in trade negotiations with other countries that have the potential to strengthen the U.S. semiconductor industry. No drawbacks are permitted on these tariffs.

Second, depending on the outcomes of the negotiations, broader tariffs may be implemented on the importation of semiconductors and derivative products. The Secretary of Commerce is required to provide an update on the market for semiconductors used in U.S. data centers, by July 1, 2026, which may result in modifications of the tariffs in the Proclamation.⁴ The Secretary of Commerce is also required to provide the President with a report within 90 days (April 14, 2026), on the outcome of negotiations under Phase One of the Proclamation. If broader tariffs are pursued following Phase One, they will be paired with a tariff-offset program to encourage domestic investment in semiconductor manufacturing.⁵

Notably, the Proclamation imposes tariffs under Section 232 (national security authority) and not the IEEPA. The President’s constitutional authority to impose “reciprocal tariffs” under IEEPA is currently the subject of litigation in Learning Resources. The U.S. Supreme Court’s decision in Learning Resources will not affect the new tariffs imposed pursuant to the Proclamation because they rely on national security authority rather than IEEPA.⁶ As such, the utilization of Section 232 authorities may be the next tool to reimplement reciprocal tariffs in the event the U.S. Supreme Court rules the current IEEPA tariffs are contrary to law.

Key End-Use Exceptions Under the Proclamation

The 25% tariff is in addition to other duties, fees, exactions, and charges unless otherwise stated in the Proclamation. However, imports included within the definition of “semiconductor articles” as defined by the Proclamation must (1) be a logic integrated circuit or contain a logic integrated circuit, and (2) meet technical parameters based on total processing performance and total dynamic random access memory bandwidth.⁷

Depending on the end usage of these covered semiconductors and derivative products, the Proclamation provides certain exceptions to the additional 25% ad valorem tariff. These exceptions include end use in:

(1) U.S. data centers;

(2) Repairs or replacements performed in the United States;

(3) Research and development in the United States involving these chips;

(4) Startups; 

(5) Non-data center consumer electronics, including gaming, personal computing, professional visualization, and automotive applications;

(6) Non-data center civil industrial applications, including robotics; and

(7) Public sector applications.⁸

Further, U.S. data centers, research and development, and startups all must meet certain criteria to be exempted from the additional 25% tariffs on semiconductors and derivative materials.⁹

What This Means for Semiconductor Importers  

As Phase One of the Proclamation is already underway, importers should assess their exposure to the new tariff and identify the end-use of all imported semiconductors and derivative products that are covered under the new tariff. Because the tariffs are dependent on end-use cases — if the semiconductors and derivative materials meet the processing criteria — importers should prepare documentation and certification for all applicable exemptions such as qualifying data centers. Without verification of end-use exemptions, importers may face heightened tariff burdens in addition to the current tariff regime.

In Phase Two under the Proclamation, importers should monitor the government’s implementation and potential expansion of measures: track the 90-day negotiation progress report, the July 1, 2026, data-center update, and any amendments, regulations, or guidance issued to implement or calibrate the tariff, including any broader tariffs and a tariff-offset program contemplated by the Proclamation.

Importers should build contingency plans now to adjust classifications, sourcing, certifications, delivery terms, and project economics if exemptions narrow or broaden or if tariff rates change. Importers that maintain supply chains with domestically sourced semiconductors and derivative materials are well-positioned to endure short-term friction under this new tariff regime with fewer interruptions and price fluctuations. Furthermore, as importers develop tariff mitigation plans, ensuring proper oversight and compliance with the laws is important.

Conclusion

This Proclamation illustrates that tariff activity will continue regardless of how the U.S. Supreme Court rules on IEEPA tariffs. Importers should therefore continue ongoing tariff-mitigation planning rather than deferring decisions in anticipation of the Learning Resources decision. The Administration’s use of Section 232 authority confirms that additional tariff measures may be pursued even if IEEPA-based tariffs are curtailed.

Importers intending to rely on the end-use exceptions should ensure that their documentation is complete, consistent, and supported by internal controls. Given the increased enforcement focus on tariff exception claims, importers may want to consult experienced trade counsel to confirm applicability and reduce the risk of challenges to exemption eligibility.