Editor’s Note: Although this article from CS sister publication CEPro is written for the custom integration industry, the impact of the Trump administration’s upcoming tariffs on semiconductors will also most likely have a severe, negative impact on the security technology industry and its campus customers.
The public comment window for the U.S. Section 232 semiconductor probe closes this Wednesday (May 7, 2025). Following the conclusion of the probe, the U.S. government under President Trump will then make the decision on whether to pursue tariffs on semiconductor imports on grounds that extensive reliance on foreign production of chips is a national security threat, according to filings from the Federal Register.
The probe is part of a process by the current administration that has already seen the implementation of steel and aluminum tariffs, with pharmaceuticals also in scope. While the public comment window is open, members of the public can voice their comments, concerns or other information they deem pertinent to the investigation.
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Currently products classified as part of the semiconductor industry are exempt from the array of tariffs Trump levied at global trade partners on April 2, 2025. Once instituted, products within this sector will be taxed at their own separate rate, independent of any prior tariff being levied at the country of origin.
Semiconductor Tariffs Could Add Further Strain to Integration Industry
A tariff on semiconductors has the potential to have further impact on the custom integration industry as many of the products installed by custom integrators, including smart TVs, control systems, AV processors and lighting, all use semiconductors in their construction.
Currently, U.S. manufacturers also rely heavily on chips imported from Taiwan, which is something that the prior administration had been working to address via the CHIPS Act, which so far has offered nearly $6.72 billion to Taiwan Semiconductor (TSMC) to construct more plants in the U.S., with an additional $36 billion in proposed funding.
This program was, however, seen as potentially being in jeopardy, however, following President Trump’s calls to end the bill.
Critics of placing tariffs on semiconductors argue that these specific measures could disrupt supply chains in much the same way that COVID shook the supply chain for chips back in 2020. Many also argue that the CHIPS Act is a far better solution for onshoring chip manufacturing, as it offers greater encouragement to engage with the U.S. versus tariffs, which are largely seen as punishments that could ultimately drive down the demand for semiconductors due to inflated costs.
Within the smart home industry, associations such as CEDIA have fought for the preservation of the CHIPS Act, saying that it will provide “greater technology investment, create new jobs, support American innovation, ensure supply chain resiliency, and protect our national security.”
The association has also fought for multiple carveouts within the sector- and country-specific tariffs to create an environment that helps maintain jobs in the technical trades while sustaining low prices for essential products and services.
New Tariffs Will Also Remove Exemptions from Most Electronics
On April 12, 2025, the Trump administration did suspend tariffs on electronics such as laptops and smart phones. However, following this exemption, the administration then stated that these products instead would have tariffs imposed on them under these new Section 232 semiconductor tariffs.
Following the exclusion of select electronics, Gary Shapiro, CEO and Vice Chair of the Consumer Technology Association, said that Trump recognized that his tariffs will hurt consumers.
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“At the same time, the shift from IEEPA to Section 232 as a legal basis for tariffs reveals the Administration’s desire for a more durable justification,” Shapiro said in a statement. “But claiming that downstream consumer tech products qualify as ‘semiconductors’ is a stretch.”
While the probe for public comments does not end until Wednesday, the Trump administration has hinted that it will be revealing the full layout of its plan for semiconductor tariffs over the next week. The administration has also implied that there will be flexibility in working with certain companies over the tariffs.
Despite many tariffs not yet being implemented, manufacturers that serve the custom integration industry have already begun to roll out tariff surcharges or price increases on products and services depending upon their exposure to current measures.
Nick Boever is web editor for CEPro.
