"Semiconductor" Exclusion From IEEPA Reciprocal Tariffs Expanded; Section 232 Investigation Announced

The weekend saw significant shifts in U.S. semiconductor tariff policy. First, late Friday, the list of products excluded from "reciprocal" tariffs was expanded to include certain consumer electronics. This was framed as a "clarification" of the original exclusion of semiconductors, and refunds are available. Then, today, the Secretary of Commerce released a request for public comment in its investigation of the effect of imports of semiconductors, semiconductor manufacturing equipment, and derivative products on U.S. national security under Section 232 of the Trade Expansion Act of 1962. This investigation may ultimately lead to the imposition of tariffs or quotas on some or all subject products. Interested parties may wish to participate in the investigation to help shape the Commerce Department's findings and proposed remedy.

The Exclusion of "Semiconductors" from Reciprocal Tariffs Has Been Significantly Expanded

An Executive Order (EO) published on Saturday expanded the exclusion of "semiconductors" from the Reciprocal Tariffs originally announced by President Trump on April 2, 2025, pursuant to the International Emergency Economic Powers Act (IEEPA). Whereas the original Reciprocal Tariffs announcement had already excluded certain semiconductor devices and electronic integrated circuits falling within HTSUS subheadings 8541 and 8542, this weekend's expansion brought certain consumer electronics falling within HTSUS subheadings 8471, 8473, 8486, 8517, 8523, 8524, and 8528 within the scope of the exception. We summarize the additions at the end of this Insight.

Per the EO and associated guidance from U.S. Customs and Border Protection (CBP), the expanded exclusions are effective as of April 5, 2025. Importers that previously paid reciprocal tariffs on articles classified under the now-excluded subheadings may request a refund using a post-summary correction or protest, as appropriate, depending on the liquidation status of the entry.

Because such products are not subject to the reciprocal tariffs, CBP further instructs that importers should take action to correct entries as necessary to reflect the exception under the reciprocal tariff exclusion heading 9903.01.32, as soon as possible within 10 days of the cargo's release from CBP custody. Note, however, that such products of the People's Republic of China do remain subject to the 20% fentanyl tariffs previously imposed under IEEPA.

Section 232 Investigation on Semiconductors

Among the recommendations provided for in the Executive Summary of the multi-agency trade report prepared in response to the Presidential memoranda on the Trump Administration's "America First Trade Policy," was a proposal to consider "additional products and sectors {for} new Section 232 investigations, including pharmaceuticals, semiconductors, and certain critical minerals." The IEEPA reciprocal tariffs EO named all three product groups as among those that were excluded from coverage.

Today, the Secretary of Commerce released notice that an investigation into imports of semiconductors and semiconductor manufacturing equipment (SME) was initiated on April 1, 2025, under Section 232. Distinct from recent executive orders directing the Secretary of Commerce to conduct Section 232 investigations into copper and wood products, the U.S. Commerce Department's ("Commerce") notice does not detail the Administration's motivations or rationale for undertaking the investigation.

Commerce describes the products under investigation as semiconductors, SME, and their derivative products. According to Commerce's notice, this "includes, among other things, semiconductor substrates and bare wafers, legacy chips, leading-edge chips, microelectronics, and SME components." Moreover, "derivative products" are characterized as including "downstream products that contain semiconductors, such as those that make up the electronics supply chain." While the Section 232 notice does not list associated HTSUS subheadings, the expansive description suggests that all products recently excluded from IEEPA reciprocal tariffs as "semiconductors" likely fall within the scope of the Section 232 investigation. This falls more broadly within the Administration's policy choices to avoid "stacking" tariffs, which would occur if a country-wide tariff policy were implemented alongside sectoral tariffs covering the same products as covered by country-wide tariffs.

A Short Public Comment Period Opens

The Section 232 notice provides a narrow window for public comment, similar to Section 232 investigations into copper and wood product imports begun earlier this year. Comments will be due by May 7, 2025. Commerce has specifically requested input with respect to the following:

• Current and projected U.S. demand for semiconductors (including as embedded in downstream products) and SME;
• The extent to which U.S. semiconductor and SME production can or is expected to meet U.S. demand;
• The role of foreign supply (fabrication, assembly, testing, and packaging) in meeting U.S. semiconductor and SME demand;
• The concentration of U.S. semiconductors and SME imports (including as embedded in downstream products) from a small number of foreign sources and the associated risks;
• The impact of foreign government subsidies and predatory trade practices on U.S. semiconductor and SME industry competitiveness;
• The economic or financial impact of artificially suppressed semiconductor and SME prices due to foreign unfair trade practices and state-sponsored overcapacity;
• The potential for export restrictions by foreign nations, including the ability of foreign nations to weaponize their control over semiconductor and SME supply chains;
• The feasibility of increasing U.S. semiconductor and SME capacity to reduce import reliance;
• The impact of current trade and other policies on U.S. semiconductor and SME production and capacity, and whether additional measures, including tariffs or quotas, are necessary to protect national security;
• What product types and node sizes could be built only using SME from U.S. companies;
• What SME is manufactured abroad and faces limited competition from U.S.-made products;
• What SME parts or components are only available outside the United States; and
• Where the U.S. workforce faces a talent gap in production of semiconductors, SME or SME components

Comments should be specific to different semiconductor product types and node sizes where appropriate. Commenters may also raise "any other relevant factors" and might therefore consider how any remedy should be structured, including how best to approach semiconductors on derivative products.

The governing statute provides Commerce up to 270 days to prepare its investigation report, but a faster timeline is entirely possible, perhaps even likely given that Commerce has evidently been considering this matter for several weeks already. Thereafter, the President has 90 days to determine whether and how to act, and a further 15 days to implement said action, if any. Again, these are maximums, and faster action is possible. Eventual action may include tariffs, quotas, or other measures. For comparison, other recent Section 232 actions on steel and steel derivative products, aluminum and aluminum derivative products, and automobiles and automobile parts have each resulted in tariff levels of 25%.

Cassidy Levy Kent can assist with preparing and filing comments for consideration in the Section 232 investigation.

Preparing Your Supply Chain

For now, the expanded exclusion of semiconductors from IEEPA reciprocal tariffs remains available for importers of those products. However, as with all modifications of IEEPA tariff regimes, the potential exists that they may be changed with little notice. Nevertheless, were the exclusions to remain in place during the pendency of the Section 232 investigation, they may provide interested companies with time to plan for the future.

Cassidy Levy Kent's attorneys, economists, compliance experts, and licensed customs brokers are ready to help companies sort through the latest changes and develop strategic responses. Cassidy Levy Kent has extensive experience counseling clients to plan compliant supply chains that manage tariff risks. Our team's deep familiarity with trade law and policy enables clients to adapt and stay ahead of the curve.

ANNEX: Amendments to Semiconductor Exclusions

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.