The following analysis regarding the Jan. 14 Section 232 tariffs announced for semiconductor products

The President on Jan. 14 issued a proclamation imposing Section 232 tariffs on certain semiconductors, semiconductor manufacturing equipment, and certain “derivative” semiconductor products based on threatened impairment of the national security, notably targeting products containing advanced chips such as those for Artificial Intelligence applications.

A summary of the action is as follows:

1. The Secretary of Commerce, U.S. Trade Representative, and any senior official they deem appropriate, will continue or pursue trade negotiations with foreign jurisdictions that have the potential to strengthen the United States semiconductor industry.  These negotiations may result in the imposition of additional tariffs with an accompanying offset program.

2. A 25% ad valorem tariff will be imposed on goods entered into the US or withdrawn from warehouse into the U.S. starting 12:01 a.m. ET on Jan. 15, 2026, for certain defined “semiconductor articles” classified within subheadings 8471.50, 8471.80, and 8473.30, HTSUS, from any country of origin, as described in the Proclamation and its Annex (2026SemiConductor.prc_.rel-ANNEX.pdf).

3. The proclamation establishes a new U.S. Note 39 and subheading 9903.79.01 which provides for the duties, and specified exemptions are set forth in 9903.79.02–9903.79.09. Per the Annex, “Semiconductor articles” is defined as imported products that are “a logic integrated circuit, or an article that contains a logic integrated circuit, that meets the technical parameters of having:

(1) a total processing performance greater than 14,000 and less than 17,500, and a total DRAM bandwidth greater than 4,500 GB/s and less than 5,000 GB/s; or

(2) a total processing performance greater than 20,800 and less than 21,100, and total DRAM bandwidth greater than 5,800 GB/s and less than 6,200 GB/s.”

A total processing performance (TPP) calculation and related technical descriptions for the computation are also provided for in this note. It further provides that if an integrated circuit is designed in a manner that achieves multiple TPP values, the highest value should be used. It also provides a definition of “total DRAM bandwidth” but states it does not include bandwidth from DRAM ICs accessed remotely over an interconnect medium.

1. New tariff provisions 9903.79.02-9903.79.09 create exceptions to the tariffs for products which may be classified in the designated HTSUS provisions, but either do not meet the above definition of semiconductor articles, or are used in an exempted circumstance:

• Products classified in the designated HTSUS provisions that do not meet the parameters above (9903.79.02).

• U.S. data centers (defined by new U.S. Note 39, which require greater than 100 megawatts (MW) of new load dedicated to AI inference, training, simulation, or synthetic data generation) (9903.79.03);

• Repairs or replacements performed in the United States (9903.79.04);

• Research and development in the United States involving these chips (as defined in new U.S. Note 39) (9903.79.05);

• Startups in the U.S., as defined by new U.S. Note 39 as an “emerging growth company,” as defined at 15 U.S.C. § 77b(a)(19) (9903.79.06);

• Non-data center consumer electronics applications in the United States (gaming, personal computing, etc. as per new U.S. Note 39) (9903.79.07);

• Non-data center civil industrial applications in the United States, including factory robotics and industrial machinery (9903.79.08);;

• U.S. public sector applications (9903.79.08); or

• Other uses that the Secretary determines contribute to the strengthening of the U.S. technology supply chain or domestic manufacturing capacity for derivatives of semiconductors.

1. The Secretary of Commerce, in consultation with the U.S. International Trade Commission and CBP will determine whether any modifications to the HTSUS, end-use certifications, or other administrative measures are necessary to effectuate or implement this proclamation or any actions taken pursuant to this proclamation.

2. Subject products are exempt from any other Section 232 action and exempt from IEEPA Reciprocal Tariffs imposed under EO 14257 and IEEPA Border Tariffs under EOs 14193 (CA) and 14194 (MX). No exemption is provided for from IEEPA Fentanyl Tariff (CN).

3. Pursuant to the new provisions set forth in the Annex, these duties apply in addition to any preferential treatment from a free trade agreement or preference program, and in addition to any applicable AD/CVD.

4. Goods qualifying for Chapter 98 provisions are exempt or partially exempt, as applicable, except that the duties will be assessed on the full value of goods qualifying under 9802.00.60.

5. No drawback will be available for covered products.

10) Covered products must be admitted in FTZs under privileged foreign status on or after the imposition date.

Commerce Reduces Reciprocal and Section 232 tariffs for Certain Taiwan Products

The Commerce Department announced Jan. 15 that it has reached an agreement with Taiwan to expand market access for U.S. companies in the Taiwanese semiconductor, AI, defense technology, telecommunications, and biotechnology industries. In response, the U.S. reciprocal tariff rate applied to Taiwanese goods will total no more than 15% and the Section 232 duties applied to Taiwanese auto parts, timber, lumber, and wood derivative products will total no more than 15%.

The U.S. will also apply a 0% reciprocal tariff for generic pharmaceuticals, their generic ingredients, aircraft components, and unavailable natural resources.

Meanwhile, the Commerce Department said future Section 232 duties applied to Taiwanese semiconductors will “reward” Taiwanese semiconductor manufacturers that invest in the U.S.

“Taiwanese companies building new U.S. semiconductor capacity may import up to 2.5 times that planned capacity without paying Section 232 duties during the approved construction period, with a lower preferential Section 232 rate for above-quota imports,” the Commerce Department said.

Also, Taiwanese companies which have completed new chip production projects in the U.S. will still be able to import 1.5 times their new U.S. production capacity without paying Section 232 duties, according to the Commerce Department announcement, the department said.

The NCBFAA Customs Committee and Counsel of Sandler, Travis & Rosenberg, P.A., will provide updates from the Commerce Department regarding this Reciprocal and Section 232 tariff announcement for Taiwan products, as well as related Customs and Border Protection (CBP) guidance, as soon as its available.