Paving the Way for New Tariffs? Trump Orders Section 232 Investigation on Critical Mineral Imports

On Tuesday local time, US President Trump ordered the US Department of Commerce to conduct a so-called "Section 232 investigation" on critical minerals imported from abroad. This was seen as a prelude to imposing tariffs on critical minerals, which could further escalate the global trade war initiated by the US. The White House stated that day that Trump signed an executive order to investigate the national security risks posed by the US's reliance on imported processed critical minerals and their derivative products. The White House said in a fact sheet that the executive order requires the Secretary of Commerce to initiate a "Section 232" investigation under the 1962 Trade Expansion Act to "assess the impact of these materials' imports on US security and resilience." If the Secretary of Commerce's report concludes that the import of critical mineral products threatens US national security, and the President decides to impose tariffs, then any tariff rates levied under "Section 232" will replace the current reciprocal tariff rates, according to Trump's April 2 order. The executive order covers critical minerals, including rare earth elements. The White House stated that these critical minerals are vital to US national security and economic recovery and are a "critical component of the defense industrial base." The White House said that although the US has some critical minerals, it still imports a large amount, which poses economic and security risks. The Trump administration stated that the US relies on imports for at least 15 critical minerals. According to relevant laws, the Secretary of Commerce is expected to announce the investigation results within 270 days. Trump recently hinted that his administration might consider imposing tariffs on critical minerals, having already imposed tariffs on other specific industries such as steel, aluminum, automobiles, and auto parts. Section 232 investigations are often used by the US as a tool for trade protectionism, imposing additional tariffs on imported products under the pretext of "national security." On Monday, the Trump administration also announced that it had initiated "Section 232 investigations" on semiconductors and pharmaceuticals. Last month, Trump also invoked emergency powers to enhance the US's ability to produce critical minerals—part of a broader effort to accelerate domestic natural resource development and reduce reliance on foreign imports. The executive order aims to provide financing, loans, and other investment support for domestic processing of critical minerals. Trump has implemented comprehensive tariffs aimed at boosting US manufacturing and energy production and generating new revenue for the federal government. However, these measures have disrupted the market. There are concerns that Trump's tariffs will lead to higher prices for consumers, disrupt international supply chains, and reduce trade, potentially plunging the global economy into recession. Earlier this month, Trump signed two executive orders on "reciprocal tariffs" at the White House, announcing that the US would establish a 10% "minimum benchmark tariff" for trading partners and impose higher tariffs on certain trading partners. Last week, the US announced that it would suspend high "reciprocal tariffs" on dozens of countries for 90 days, but the 10% basic tariff would remain in effect to give countries time to negotiate with the Trump administration. However, this suspension did not stop Trump from advancing tariffs on specific industries.