ADJUSTING IMPORTS OF SEMICONDUCTORS, SEMICONDUCTOR MANUFACTURING EQUIPMENT, AND THEIR DERIVATIVE PRODUCTS INTO THE UNITED STATES
1/14/2026
Action Summary
- National Security Concern: The Secretary of Commerce’s investigation found that current import levels of semiconductors, semiconductor manufacturing equipment, and derivative products threaten U.S. national security and economic stability.
- Dependency on Foreign Supply: The U.S. produces only about 10% of its semiconductor needs, relying heavily on imports, which poses risks to defense systems, critical infrastructure, and economic welfare.
- Importance of Semiconductors: Semiconductors are vital for modern military defense (radar, communication, missile guidance), critical infrastructure (communications, energy, medical), and emerging AI technologies.
- Two-Phase Plan:
- Phase One: Continue trade negotiations with key foreign jurisdictions and immediately impose a 25% ad valorem tariff on a narrow category of chips critical to AI and technology, excluding those supporting domestic supply chain buildout.
- Phase Two: Post-negotiation, potentially expand tariffs significantly with an accompanying tariff offset program to incentivize domestic semiconductor manufacturing.
- Tariff Implementation:
- Effective January 15, 2026, a 25% tariff will be applied on Covered Products, except for specified exemptions (e.g., U.S. data centers, R&D, repairs, startups, non-data center consumer and industrial applications, and public sector uses).
- This tariff is additional to any other import duties and is designed to promote domestic production while reducing reliance on foreign supply chains.
- Administrative and Legal Provisions:
- Actions are authorized under Section 232 of the Trade Expansion Act of 1962 and Section 604 of the Trade Act of 1974.
- The Secretary, Trade Representative, and other senior officials are tasked with negotiating trade agreements and making necessary modifications to the Harmonized Tariff Schedule (HTSUS).
- Monitoring and Review:
- An update on the negotiation progress is required within 90 days.
- The Secretary will continue to monitor the market and national security implications of semiconductor imports and report potential needs for further action, with a detailed update by July 1, 2026.
- Supersession of Previous Orders: Any inconsistent provisions from prior proclamations or executive orders are superseded by this action.
Risks & Considerations
- The Executive Order’s focus on strengthening the domestic semiconductor industry may impact research collaboration and funding opportunities for Vanderbilt University’s engineering programs, particularly those related to semiconductor technologies.
- Increased tariffs on semiconductor imports could lead to higher costs for technology and research equipment, affecting budget allocations for university departments dependent on such technologies.
- There is a potential risk to international partnerships and collaborations, particularly with institutions in countries affected by the new trade policies. This could lead to challenges in joint research initiatives and exchange programs.
- The focus on AI-enabled semiconductor supply chains may present opportunities for Vanderbilt to engage in research that aligns with national security priorities, potentially attracting federal funding.
- The extensive monitoring and review of semiconductor imports may lead to regulatory changes that could impact procurement processes within the university.
Impacted Programs
- School of Engineering may need to adapt its curriculum and research focus to align with national priorities in semiconductor technology and AI.
- Office of International Programs might face challenges in maintaining collaborations with foreign universities due to potential trade tensions and restrictions.
- Vanderbilt Data Science Institute could benefit from increased emphasis on AI research, potentially receiving new funding opportunities aligned with federal priorities.
Financial Impact
- The imposition of tariffs may increase the cost of imported technology products and research equipment, impacting departmental budgets and financial planning.
- Potential new funding opportunities may arise as the government seeks to strengthen domestic technology supply chains. Vanderbilt may need to strategically position itself to access these funds.
- The emphasis on reducing reliance on foreign supply chains might lead to increased demand for domestic expertise and research, offering financial benefits to programs that align with these objectives.
Relevance Score: 3 (The order presents moderate risks involving compliance and potential shifts in research focus and funding strategies.)
Key Actions
- Vanderbilt’s School of Engineering should closely monitor developments in semiconductor import policies. Adjustments in the supply chain may impact research and partnerships focusing on semiconductor technology and AI applications.
- The Office of Federal Relations should engage with policymakers to understand the implications of proposed tariffs and explore opportunities for federal support in semiconductor research and development. This proactive approach can help secure funding and resources.
- Vanderbilt’s Technology Transfer Office should explore partnerships with domestic semiconductor manufacturers to bolster research initiatives that align with national security interests. This can enhance the university’s role in strengthening domestic manufacturing capabilities.
- Vanderbilt’s Center for Technology, Information, and Innovation should assess the impact of semiconductor tariffs on existing and future data center operations. This evaluation will be crucial for maintaining operational efficiency and adapting to new trade policies.
Opportunities
- The focus on increasing domestic semiconductor production presents an opportunity for Vanderbilt to expand research collaborations with U.S. manufacturers. By contributing to technological advancements, the university can position itself as a leader in semiconductor innovation.
- The emphasis on reducing reliance on foreign supply chains offers a chance for Vanderbilt’s innovation initiatives to secure investments and partnerships that support the development of a robust domestic technology infrastructure.
- By participating in policy discussions and trade negotiations, Vanderbilt can influence decisions that impact higher education and technology sectors, ensuring that its interests are considered in national policy formulation.
Relevance Score: 4 (The proclamation necessitates major process changes due to its significant impact on semiconductor supply chains and related research opportunities.)
Timeline for Implementation
- Within 90 days of January 14, 2026: The Secretary and the Trade Representative must update the President on the progress of negotiations.
- January 15, 2026, at 12:01 a.m. EST: The 25 percent ad valorem tariff becomes effective for Covered Products.
- By July 1, 2026: The Secretary shall provide an update on the semiconductor market for United States data centers.
Relevance Score: 5
Impacted Government Organizations
- Department of Commerce: The Secretary of Commerce conducted the investigation and is directed to work on the trade and tariff provisions related to semiconductor imports.
- United States Trade Representative (USTR): Tasked to negotiate trade agreements related to semiconductor imports and ensure national security considerations are met in these negotiations.
- International Trade Commission: The Chair is consulted regarding any necessary modifications to the Harmonized Tariff Schedule and other administrative measures to implement the proclamation.
- U.S. Customs and Border Protection (CBP): Empowered to administer and enforce the tariff measures imposed on imported semiconductors and derivative products.
- Department of Homeland Security: The Secretary, in consultation with CBP, is involved in implementing security measures and any necessary adjustments to import regulations related to the action.
- All Executive Departments and Agencies: Directed to take appropriate measures to implement this proclamation, thereby extending its impact across the entire federal government.
Relevance Score: 5 (The directive applies across the entire government, involving multiple key agencies and all executive departments.)
Responsible Officials
- Secretary of Commerce – Initially conducted the investigation and is directed to work with other officials on negotiations.
- United States Trade Representative – Tasked to jointly negotiate agreements and update the President on negotiations within 90 days.
- Secretary of Homeland Security – Authorized, along with the Secretary and Trade Representative, to implement measures and issue necessary regulations.
- Chair of the International Trade Commission & Commissioner of U.S. Customs and Border Protection – Consulted by the Secretary to determine modifications to the Harmonized Tariff Schedule and review administrative measures.
- U.S. Customs and Border Protection (CBP) – Responsible for administering the tariff imposed by this proclamation.
Relevance Score: 5 (Directives affect high-level, Cabinet, and other senior agency officials responsible for national security and trade policy).