US President Donald Trump has slapped steep tariffs on dozens of trading partners, including India. He announced a 25% tariff on India, and an unspecified penalty for buying crude oil and military equipment from Russia.
Pharmaceuticals and electronics, which form a significant portion of India's $85 billion exports to the US, however, are not subject to these tariffs due to provisions under Section 232 of the Trade Expansion Act.
What is Section 232 of the Trade Expansion Act?
Section 232 is a provision under US trade law that allows the president to impose tariffs or quotas on imports if they are found to threaten national security. As per the official records, this clause gives the US president considerable authority to either tax or exempt certain imports following a security review.
The US is reportedly reviewing key sectors, including semiconductors, under Section 232, but for now, smartphones, including iPhones made in India, are exempt from import duties, Bloomberg reported. The exemption, introduced in April 2025, also covers computers and benefits companies such as Apple and Nvidia.
What products are exempt under Section 232?
According to Section 232 of the US trade law, products such as pharmaceuticals and electronic items cannot be subjected to tariffs under this provision. This ensures that essential sectors like healthcare and technology are protected, even during broader trade disputes.
How does the Section 232 process work?
The process begins with an investigation by the US Department of Commerce, which can either act on a request from a government official or initiate the probe itself. Once an inquiry is launched, the Department must notify the Secretary of Defense and consult on national security implications.
As per Investopedia, the Commerce Department has 270 days to submit its findings to the president. The president then has 90 days to review the report and decide whether to impose trade restrictions.
According to Investopedia, if the president agrees with the findings, they may impose tariffs or quotas to restrict imports deemed harmful to national security. Alternatively, the president can opt for no action, based on the department's recommendations.
Past and current uses of Section 232
The provision has been employed on several occasions. Trump used Section 232 in 2018 to impose tariffs on steel and aluminium imports, citing national security risks. These tariffs reportedly affected a wide range of products, including everyday items like fishing reels and brooms.
Trump reactivated the provision after returning to the White House, relying on the original 2018 findings to reintroduce 50% tariffs on steel and aluminium.
In February this year, he directed the Commerce Department to investigate copper imports. Following the report, the administration announced that a 50% tariff would apply to semi-finished and derivative copper products beginning August 1.
Additionally, Trump had initiated a Section 232 probe into automobiles and auto parts in 2019, which led to further trade restrictions.
A legacy from the 1960s
Section 232 stems from the Trade Expansion Act of 1962, enacted during the presidency of John F Kennedy.
He had described it as “The most important piece of legislation, I think, affecting economies since the passage of the Marshall Plan.”
