The United States has opened the door to potential tariffs by launching investigations into imported chips and drugs

The Trump administration is moving ahead with plans to impose tariffs on semiconductor and pharmaceutical imports, with the Commerce Department leading an investigation into the two industries. This is a precursor to the US tariffs on semiconductors and drugs, and the trade war launched by Trump may further expand.

The Commerce Department said in two notices published in the Federal Register on Monday (April 14) that it will investigate the national security implications of imported semiconductors and semiconductor manufacturing equipment, as well as drugs and drug ingredients, including finished drugs.

Trump has long denounced foreign-made drugs and chips as a threat to U.S. national security and threatened to impose tariffs on those imports to revive the U.S. pharmaceutical and chip industries. But these tariffs could also wreak havoc on supply chains, driving up related costs for Americans.

The new tariffs could hit the chip industry hard. In an industry that generates more than US $600 billion (S $790 billion) in sales worldwide, chips are crucial to everything from cars and aircraft to mobile phones and consumer electronics. The semiconductor supply chain is still not fully shaken off the impact of the coronavirus pandemic, and US tariffs could put new pressure on the chip industry.

The tariffs would also deal a blow to the world's largest pharmaceutical companies, with drugmakers Merck & Co and Eli Lilly & Co operating dozens of manufacturing sites around the world.