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The US commerce department has recently initiated two national security probes that could potentially result in tariffs being imposed on drones and a key raw material utilized in the production of chips and solar panels.
In notifications released on Monday evening, the commerce department announced its intention to investigate the imports of unmanned aircraft systems along with their parts and components. Additionally, a separate analysis will be conducted on the supply chains of polysilicon.
The investigations will delve into the impact of foreign subsidies, “predatory trade practices,” as well as the potential for foreign nations to exploit export controls in order to wield influence over supplies of both polysilicon and drone components, according to the notifications.
These probes represent the latest actions in President Donald Trump’s ongoing trade war and contribute to a series of investigations that could potentially result in tariffs being imposed on vital sectors and industries. Trump has previously utilized Section 232 of the Trade Expansion Act to impose tariffs of 50% on steel and aluminum imports, as well as a 25% tariff on imported cars and car parts.
Just last week, Trump announced plans to implement a 50% tariff on copper imports starting August 1 following the conclusion of another Section 232 investigation. Furthermore, his administration is currently conducting investigations on trade in pharmaceuticals, lumber, aerospace parts, chips, and consumer electronics, all of which could potentially lead to tariffs on a variety of imports.
The widespread application of sectoral tariffs has escalated trade tensions with US trading partners and allies, many of whom have been engaged in prolonged negotiations with Trump administration officials regarding the impending “reciprocal” tariffs.
Despite efforts by major trading partners such as the EU, Japan, and Canada to seek relief from the broad sectoral tariffs, they have been unsuccessful in securing exemptions from Trump.
The initiation of these new probes introduces further uncertainty regarding potential future tariffs that could be imposed on imports from allies and trading partners. China holds a dominant position in the manufacturing of polysilicon and other solar-related technologies, as well as commercial drones.
According to Drone Industry Insights, China currently produces 70-80% of the world’s commercial drones and controls the production of critical components. Earlier this year, under the administration of former President Joe Biden, the US had already raised tariffs on solar wafers and polysilicon imported from China to 50%.
These developments underscore the evolving landscape of international trade and the complexities involved in balancing national security concerns with the imperatives of global commerce. Stay informed with the White House Watch newsletter as we continue to monitor and analyze the impact of these developments on Washington, business, and the world.
