ITIF Says “Build Capacity First, Don’t Escalate Tariffs” in Response to Trump Section 232 Proclamation

WASHINGTON—Following the Trump administration’s Proclamation invoking Section 232 of the Trade Expansion Act of 1962 on semiconductors and related equipment, the Information Technology and Innovation Foundation, the leading think tank for science and technology policy, released the following statement from Vice President Stephen Ezell:

The Trump administration is right that the United States does not manufacture enough semiconductors—and that rebuilding domestic chip capacity is a national priority. But tariffs are not the right way to achieve that goal.

The Section 232 proclamation reflects a serious effort to assess semiconductor-related national security risks, and it correctly recognizes both the need to expand U.S. production and the continued importance of imported chips to America’s technology base and AI leadership. The administration has already taken constructive steps to strengthen domestic manufacturing, including tax reforms that enable first-year expensing, permitting reforms to accelerate major projects, and the creation of a U.S. Investment Accelerator to support large-scale investment.

Against that backdrop, it matters that the newly announced 25 percent tariff is narrowly scoped. The tariff applies to a limited set of advanced AI chips intended for re-export to China and does not apply to semiconductors used broadly across the U.S. technology supply chain. That restraint avoided far more damaging outcomes that would have raised costs and disrupted critical industries.

The proclamation also directs U.S. trade negotiators to continue working with partners to reduce barriers in global semiconductor supply chains—an approach that better supports U.S. competitiveness than blunt trade measures.

At the same time, the administration has signaled that broader semiconductor tariffs remain a possibility. That would be the wrong direction. The most effective way to strengthen U.S. semiconductor leadership is through sustained investment in innovation, manufacturing capacity, and workforce development—not expanding trade restrictions.

If this narrow tariff proves to be the final outcome of the Section 232 investigation, the United States will have avoided a much more damaging result. But long-term success in semiconductors will depend on building, not taxing, America’s innovation base.

Contact: Austin Slater, [email protected]