The Trump administration is considering new tariffs on imported critical minerals and their derivative products, which may affect the automotive industry’s access to essential manufacturing materials. A national security investigation into this issue is currently underway.
This inquiry could lead to tariffs on items such as semiconductor wafers, anodes, and cathodes, which are vital to both chipmaking and vehicle electronics. The proposed action follows a separate review of imported semiconductors and manufacturing equipment.
The effort is part of a broader strategy to protect and rebuild the domestic electronics supply chain, a top priority for the Trump administration. In an April 13 post on Truth Social, President Donald Trump emphasized, “We are taking a look at Semiconductors and the WHOLE ELECTRONICS SUPPLY CHAIN in the upcoming National Security Tariff Investigations.” He added that China is “by far” the worst offender regarding unfair trade practices.
The investigation was initiated by a presidential executive order in April under Section 232 of the Trade Expansion Act of 1962, which authorizes the Commerce Department to recommend tariffs if imports are deemed a threat to national security. Final recommendations are due in October, 180 days from the start of the probe.
Secretary of Commerce Howard Lutnick has signaled that electronics tariffs could be implemented as early as May or June. The department is also evaluating the effects of foreign “predatory economic, pricing, and market manipulation strategies,” particularly in the supply of minerals used in semiconductor and battery production.
Although the U.S. semiconductor industry holds about 50% of the global market share, it still depends on foreign sources for raw materials. The International Energy Agency projects that by 2030, China will supply over 90% of battery-grade graphite and 77% of refined rare earth metals.
The automotive sector, which does not purchase semiconductors directly but receives them through Tier 1 suppliers, could still face cost pressures if tariffs increase prices or restrict supply. Leasing and manufacturing costs for vehicles—especially EVs—could rise accordingly.
As of May 13, the Commerce Department had received 19 public comments. China, meanwhile, has already restricted exports of rare earth minerals in retaliation for existing U.S. tariffs. While the recent U.S.-China tariff ceasefire lowered some duties, China has kept tight controls on mineral exports to maintain leverage.
Ultimately, the administration aims to boost domestic production of semiconductors and electronic components.
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