The Commerce Department’s imminent Section 232 investigation — launched in April and expected to conclude soon — may fundamentally shift how the United States acquires semiconductors. The chips America imports range from commodity devices embedded in household appliances to the expensive, high-performance AI processors that power the AI boom, designed in America by Nvidia, but manufactured in Asia.
Taiwan and Korea sit at the center of this challenge. Together, they produce the majority of semiconductors used by the United States across nearly every category. This concentration represents a major national security risk, given China’s preparations and repeated threats to use force against Taiwan and antagonism toward South Korea.
Commerce Secretary Howard Lutnick phrased the situation thus in a recent interview: “If you can’t make your own chips, how can you defend yourself?”
Tariffs are one tool to address this exposure, designed to boost demand for chips manufactured in the United States. But they are not enough. Lutnick offers a second measure, called “chip for chip.” It would tie tariff waivers directly to verifiable domestic production milestones, incentivizing U.S. firms to act more in the national interest.
However, Lutnick’s ‘chip-for-chip’ framework could succeed only if Washington pairs it with enforceable production benchmarks and demand-side incentives. Otherwise, it risks becoming another half-measure in America’s decades-long struggle to rebuild semiconductor sovereignty.
