Presidential Action on Semiconductors and Critical Minerals Under Section 232

Overview

On January 14, 2026, President Trump issued two proclamations pursuant to Section 232 of the Trade Expansion Act of 1962.[1] One proclamation levies a new 25% tariff on semiconductor imports and directs the U.S. secretary of commerce and U.S. trade representative to negotiate international agreements related to semiconductor supply chains and trade. The other proclamation directs the same two officials to negotiate international agreements related to critical minerals. 

Both proclamations leave the door open for additional measures. The president directed the secretary of commerce and trade representative to provide updates on semiconductor negotiations by April 14, 2026, and on critical minerals by July 13, 2026. 

Semiconductor Proclamation 

The proclamation targeting semiconductors levies tariffs on imports of semiconductors, semiconductor manufacturing equipment, and their derivative products from all countries.

The proclamation lays out a two-phase path. The first phase imposes a 25% ad valorem tariff on certain advanced computing chips and particular derivative articles. Products that contribute to the development of the U.S. technology supply chain are exempt from the tariff. During this phase, the secretary of commerce and trade representative are directed to negotiate agreements to restrict imports that may threaten U.S. national security. 

Phase two begins when trade negotiations conclude and may include imposition of “significant” tariffs, depending upon the outcome of negotiations. The secretary of commerce and trade representative are to report the outcome of negotiations by April 14, 2026. The United States has already reached framework agreements with some countries/regions, including South Korea, Taiwan, and Japan, that will potentially reduce their exposure to semiconductor Section 232 tariffs in exchange for significant investment in the United States.

Semiconductor Tariff Application

The 25% tariff applies immediately to certain advanced integrated circuits (ICs) and products containing ICs that meet one of the following technical specifications:

• Contain a total processing performance (TPP)[2] between 14,000 and 17,500 and total dynamic random-access memory (DRAM) bandwidth between 4,500 gigabytes per second (GB/s) and 5,000 GB/s
• Contain a total TPP between 20,800 and 21,100 and total DRAM between 5,800 GB/s and 6,200 GB/s

However, some of the most important domestic uses of ICs and IC-containing products are exempt from the tariff. The tariff does not apply to ICs and IC-containing products when used: 

• In U.S. data centers, defined as facilities that require more than 100 megawatts of new load dedicated to AI inference, training, simulation, or synthetic data generation
• For repairs or replacement in the United States
• For research and development in the United States, defined as (1) a systematic, intensive study directed toward greater knowledge or understanding of the subject studied; (2) a systematic study directed specifically toward applying new knowledge to meet a recognized need; or (3) a systematic application of knowledge toward the production of useful materials, devices, services, or methods, including design, development and improvement of prototypes, and new processes to meet specific requirements
• By startups, defined as emerging growth companies that have total annual gross revenues of less than $1,000,000,000 during the most recently completed fiscal year
• In non-data-center consumer electronics applications in the United States, including gaming, personal computing, professional visualization, workstation applications, and automotive applications
• In non-data-center civil industrial applications in the United States, including factory robotics and industrial machinery
• In U.S. public sector applications

Some of these categories are vague, and additional U.S. Customs and Border Protection guidance and clarification may be necessary.

Critical Minerals Proclamation

The critical minerals proclamation directs officials to swiftly negotiate agreements that secure adequate U.S. supplies of processed critical minerals and their derivative products (PCMDPs) and mitigate supply chain vulnerabilities. PCMDPs are used in aerospace, surveillance, and communications systems. Negotiations will focus on promoting price floors, reducing price volatility, and other trade-restricting measures. Unlike the semiconductor proclamation, this proclamation does not immediately impose tariffs but reserves the right to do so if negotiated agreements fail to achieve their intended solutions. It also contemplates a potential minimum export price obligation on certain critical minerals. This measure follows China’s October 2025 announcement of export restrictions on such minerals. While the restrictions were subsequently suspended until November 2026, resulting turbulence has caused uncertainty in the foreign markets and price volatility. 

Background

Section 232 authorizes the president to negotiate with foreign countries and to take restrictive measures—including imposing tariffs—to adjust imports that threaten to impair national security. Pursuant to directions from the president, the U.S. Department of Commerce initiated Section 232 investigations to determine the impact of imports of PCMDPs and semiconductors, semiconductor manufacturing equipment, and their derivative products. The investigations’ findings, though not public, are reported by the proclamations to have found that U.S. national security is threatened by reliance on such imports.

A number of Section 232 tariff orders are currently in force, covering most imports of steel, aluminum, and copper (including derivative articles); passenger vehicles, trucks, buses, and parts; and timber, lumber, and other wood products. The administration is also conducting Section 232 investigations into pharmaceuticals and their active ingredients, commercial aircraft, polysilicon, unmanned aircraft systems, wind turbines, industrial machinery, robots, and medical and personal protective equipment.

Endnotes

[1] 19 U.S.C. 1862.

[2] TPP = 2 × (theoretical peak number of TOPS for multiply-accumulate computation) × (maximum bit length), aggregated over all processing units on the integrated circuit.