On July 8 (ET), during a Cabinet meeting, former President Trump threatened to impose high tariffs on copper and pharmaceuticals, at levels far exceeding the market’s expected 25% range. Unlike his earlier reciprocal tariffs, this round would mainly rely on Section 232 investigations initiated by the U.S. Department of Commerce.
What Is a Section 232 Investigation?
Section 232 investigations are authorized under Section 232 of the Trade Expansion Act of 1962, allowing the U.S. Department of Commerce to assess whether specific imports threaten national security and to submit its findings to the President. Based on the report, the President has the authority to impose measures, including tariffs, to address any identified threats.
How long does an investigation usually take?
By statute, the Commerce Department must deliver its findings to the President within 270 days of launching an investigation, focusing primarily on whether the imports in question harm U.S. national security. The President then has 90 days to decide whether to act. In practice, investigations typically last between five and twelve months. Of the eight investigations completed since 2017, six took nine months, one took five months, and one lasted twelve months.
What factors are considered?
A Section 232 review evaluates U.S. domestic capacity and demand, foreign supply chain risks, and other factors. The five main areas include:
Current U.S. demand for the product;
Domestic production capacity and self-sufficiency;
Major sources of imports and the risks of supplier concentration;
The impact of foreign subsidies and unfair trade practices on the U.S. industry;
The effectiveness of current trade policies and whether additional measures, such as tariffs or quotas, are needed.
Once initiated, a Section 232 investigation can end in three ways: (1) Commerce terminates the investigation if no threat is found; (2) the President chooses not to act despite a finding of threat; or (3) the President implements trade restrictions. If the Department concludes that imports pose no threat, the probe is closed without further action. Otherwise, the President has broad discretion over whether and when to act.
Most Section 232 cases have occurred under Trump’s leadership. Between 2000 and 2016, the provision was largely dormant, used only once in 2001 to probe iron ore and semi-finished steel. However, with the resurgence of protectionism during Trump’s first term, the Commerce Department launched 15 Section 232 investigations from 2018 onward, including seven new probes opened between March and May 2025 that are still underway.
Section 232 measures could become an alternative to reciprocal tariffs. The U.S. Court of International Trade (CIT) previously ruled that Trump’s use of the IEEPA to levy reciprocal tariffs exceeded his legal authority. While that lawsuit remains unresolved on appeal, Section 232 offers a legally sturdier basis for imposing tariffs. First, its statutory foundation is stronger and more insulated from CIT rulings or congressional challenges. Second, the definition of “national security” under Section 232 is intentionally broad, giving the President significant discretion.
Currently, seven Section 232 probes remain pending, covering copper, lumber and wood products, semiconductors, pharmaceuticals, trucks, critical minerals and derivatives, commercial aircraft, and jet engines. In 2024, U.S. imports of these product categories totaled USD 658.28 billion, accounting for 20.2% of total U.S. imports. Major sources include Canada, Mexico, Ireland, and Germany.
Impacts and Strategic Purpose
Which countries are most affected?
Countries with high exposure include Canada, Ireland, Singapore, Belgium, and Saudi Arabia, where the seven targeted product groups together account for over 40% of each country’s total exports to the U.S. Specific product targeting is also evident: critical minerals largely implicate Canada; trucks mainly affect Mexico; pharmaceuticals focus on Ireland, Germany, Switzerland, Singapore, and India; semiconductors affect Taiwan and Malaysia; copper centers on Chile and Canada. The U.S. can adjust the timing and order of announcing investigation results to maximize leverage in bilateral talks.
How large is the potential impact on U.S. tariffs and inflation?
Assuming tariffs of 50% on copper, 200% on pharmaceuticals, and 25% on other categories, the U.S. average import tariff rate would rise 16.9 percentage points, increasing the average tariff on Chinese goods by about 4.1 percentage points. According to the Peterson Institute for International Economics (PIIE), a 10-point tariff hike raises short-term U.S. inflation by 0.64 percentage points—thus, a 16.9-point increase could lift inflation by 1.08 percentage points, with roughly 80% of that driven by pharmaceutical tariffs.
In practice, Section 232 has become a vital tool for U.S. trade restrictions and leverage. Commerce Secretary Howard Lutnick has repeatedly used the threat of 232 tariffs at critical negotiation moments. For example, on April 13, Lutnick said semiconductor and pharmaceutical tariffs might be unveiled within one to two months. On July 8, he announced copper tariffs could be imposed later in July or by August 1—the same date as the new reciprocal tariff deadline—and that investigations into pharmaceuticals and semiconductors would wrap up by month-end.
While the original intent was to protect national industry and encourage manufacturing reshoring, in reality, 232 tariffs serve as bargaining chips for trade talks. There are three main reasons for this:
Presidential discretion for diplomatic delay: There is precedent for delaying action despite national security claims. For instance, in 2019, after the USTR submitted its auto parts 232 report, Trump postponed measures for diplomatic reasons, only acting in March 2025.
Contradictory defense assessments: Even when the Department of Defense stated that steel and aluminum imports did not threaten its procurement, the Trump administration still imposed Section 232 tariffs and used them in negotiations with South Korea, Canada, Mexico, and the EU, offering to lift them in exchange for concessions in other sectors.
Focus on allied countries: This round of probes mostly targets imports from Canada, Mexico, and the EU—countries that collectively supply over 97% of the covered imports. China’s share is only 2.3%, underscoring that these tariffs are aimed primarily at U.S. allies as leverage for trade talks. Lutnick’s testimony before the Senate in June further illustrated how 232 measures are used to secure commercial deals.
When will results be announced?
In April, Secretary Lutnick said semiconductor tariffs could be rolled out within one to two months, but none have been announced yet. There are two likely reasons: (1) the complexity of these probes, especially for high-tech goods with intricate supply chains; and (2) the strategic need to time announcements to maximize leverage. With limited progress in trade talks before the July 9 deadline, the investigation timeline is expected to speed up. Alaric expects results to be gradually released in H2 2025, with the earliest possible decisions emerging by July or August.
Will Copper and Pharmaceutical Tariffs Be Implemented?
For copper, there is a high probability that a 50% tariff will be enacted. Based on the previous steel and aluminum tariff hikes from 25% to 50%, and the decline in domestic copper refining and smelting capacity, Alaric believes it is plausible that a national security rationale will justify a 50% copper tariff, potentially extending to downstream copper products.
However, a 200% pharmaceutical tariff appears unlikely. The U.S. heavily relies on imported pharmaceuticals, and such a steep tariff would disrupt the national healthcare system and undermine Trump’s domestic approval. Moreover, Trump signed an executive order on May 12 to reduce prescription drug prices, which directly conflicts with a tariff hike. He also indicated that pharmaceutical firms would have at least a year to shift supply chains back to the U.S., showing a clear intent to use the tariff as a negotiation tool rather than an immediate measure.
Could imposed 232 tariffs be reversed? Alaric believes that if bilateral talks go well, restrictions are more likely to be converted into quotas than fully eliminated. Since Section 232 measures are justified under “national security” and supported by Commerce Department findings, full cancellation is unlikely. More probable is a scenario where tariffs are swapped for quotas in exchange for foreign partners lowering non-tariff barriers. For example, under the newly concluded U.S.-U.K. trade agreement framework, the U.K. agreed to open its agricultural and machinery markets and reduce its digital services tax in return for a 10% tariff quota on 100,000 vehicles; any volume beyond that still faces a 25% tariff.