Executive summary

On 14 January 2026, United States (US) President Donald Trump issued a proclamation, titled "Adjusting Imports of Semiconductors, Semiconductor Manufacturing Equipment, and their Derivative Products into the United States" (the Proclamation). As a result, effective 12:01 a.m. EST on 15 January 2026, a 25% ad valorem tariff applies to certain advanced computing chips and specified derivative products if their importation does not contribute to building out the US technology supply chain. Certain defined end-use exceptions apply.

Background

On 22 December 2025, the US Secretary of Commerce concluded under Section 232 of the Trade Expansion Act that imports of semiconductors, semiconductor manufacturing equipment and their derivative products are entering in such quantities and under such circumstances as to threaten to impair US national security. The investigation highlighted limited domestic manufacturing capacity relative to demand, dependence on foreign supply chains, the centrality of semiconductors to defense systems and critical infrastructure sectors, and specific risks tied to semiconductors that enable artificial intelligence when semiconductor imports do not contribute to building the US technology supply chain. The Commerce Department recommended a two-phase approach: (1) immediate, narrow tariffs on certain AI-relevant chips, followed by (2) broader significant tariffs after negotiations, paired with a tariff-offset program to encourage domestic investment.

New Proclamation

The President concurred with Commerce's findings and issued the Proclamation, adopting a plan that combines negotiations with targeted tariffs. An immediate 25% ad valorem duty applies to the covered products — defined as certain advanced computing chips and certain derivative products described in the proclamation's Annex — effective for entries on or after 12:01 a.m. EST, 15 January 2026.

The 25% tariff is in addition to other duties, fees, exactions and charges unless otherwise stated. The particular Harmonized Tariff Schedule of the United States (HTSUS) codes covered include 8471.50, 8471.80 and 8473.30; however, the imported products covered are limited to a logic integrated circuit, or an article that contains a logic integrated circuit, that meets the technical parameters of having either a:

• Total processing performance (TPP) greater than 14,000 and less than 17,500, and a total Dynamic Random Access Memory (DRAM) bandwidth greater than 4,500 gigabytes and less than 5,000 gigabytes
• TPP greater than 20,800 and less than 21,100, and total DRAM bandwidth greater than 5,800 gigabytes and less than 6,200 gigabytes

Additionally, the tariff does not apply if covered products are imported for:

• Use in US data centers
• Repairs or replacements performed in the United States
• Research and development in the United States
• Use by US startups
• Non-data center consumer applications in the United States
• Non-data center civil industrial applications in the United States
• US public sector applications
• Other uses the Secretary determines contribute to strengthening the US technology supply chain or domestic manufacturing capacity for derivatives of semiconductors

Administration, precedence and trade facilitation

HTSUS and administration: Commerce, in consultation with the US International Trade Commission and US Customs and Border Protection (CBP), may implement HTSUS modifications, end-use certifications or other administrative measures by publishing a notice in the Federal Register to effectuate the proclamation.

Precedence over other tariffs: If a product is covered under the Proclamation and another Section 232 proclamation, the Proclamation controls. Covered Products subject to tariffs included in clause (3) of the Proclamation are not subject to tariffs imposed by Executive Orders 14257 (reciprocal tariffs), 14193 (northern border illicit drugs) or 14194 (southern border situation).

Drawback and Foreign Trade Zones (FTZs): No drawback is available on duties imposed under the Proclamation. Covered Products admitted to US FTZs on or after the effective date (except items eligible for "domestic status") must be admitted as privileged foreign status and will be dutiable upon entry for consumption based on their HTSUS classification.

Monitoring and potential adjustments

The Commerce Department will continue monitoring imports of semiconductors, semiconductor manufacturing equipment and derivatives and advise the President on any need for further action. By 1 July 2026, Commerce will provide an update on the market for semiconductors used in US data centers to inform whether modification of the tariff is appropriate. The Proclamation also notes that, depending on negotiation outcomes, the President may consider significant broader tariffs and an accompanying tariff offset program to encourage domestic manufacturing.

What this means for businesses

Importers of semiconductors should assess exposure to the products identified in the Annex and map supply chains against the end-use exceptions. Because duties hinge on intended use, companies should prepare documentation and certification processes to substantiate exemptions (e.g., data center, research and development, startup, consumer, civil industrial or public sector uses) as applicable. FTZ operators should adjust procedures to ensure privileged foreign admission of products covered by the Proclamation and plan for duty payment upon entry for consumption. With no drawback permitted, importers should evaluate sourcing, inventory and contract pricing to account for the 25% tariff. Companies across the semiconductor ecosystem should monitor the mandated 90-day negotiation update and any Federal Register notices modifying the HTSUS or establishing end-use certification requirements, as well as the 1 July 2026 review focused on data-center semiconductors.

Actions to consider

Affected companies should consider the following actions:

• Identify SKUs that may fall within the Annex definition of Covered Products and quantify duty impact for entries on or after 15 January 2026.
• Build end-use certification and recordkeeping processes to support eligibility for the specified exemptions; align purchasing and logistics to segregate exempt and non-exempt use cases.
• Review FTZ operations to ensure privileged foreign status admission for Covered Products and update inventory controls accordingly.
• Reassess contracts and pricing to address the additional 25% duty if exemptions do not apply and consider alternative sourcing or production strategies.
• Track forthcoming Federal Register notices for HTSUS changes, end-use certification mechanics and any developments from the ongoing negotiations that could expand the tariff scope.