The headline number on the semiconductor tariff, 25%, has led some electronics buyers to assume they are paying it, and others to assume it does not touch them at all. Both readings miss the structure. The Section 232 action that took effect January 15, 2026 is a 25% duty on a narrow class of advanced computing chips and specified derivative products, with a long list of exempt uses attached. For a contract electronics manufacturer, the exposure depends less on the rate than on the chip’s technical parameters and how the end use is documented.

This article covers what the action does, what the exemptions mean in practice, and what has and has not changed since it took effect.

What the Action Covers

A presidential proclamation dated January 14, 2026, titled “Adjusting Imports of Semiconductors, Semiconductor Manufacturing Equipment, and their Derivative Products into the United States,” imposed a 25% ad valorem duty on certain advanced computing chips and derivative products. Trade-advisory summaries name the NVIDIA H200 and AMD MI325X as examples. The ICPA tracker, which summarizes the action, identifies it as Proclamation 11002.

Coverage is defined by performance. Entries are classified under HTSUS 9903.79.01 when the semiconductor article meets specified technical parameters, measured by total processing performance and DRAM bandwidth. This is not a tariff on semiconductors as a category. A general-purpose microcontroller, a power management chip, or a memory part below the thresholds is not what the proclamation targets. The exact thresholds are in the proclamation and CBP guidance; the trade summaries we reviewed do not reproduce them, so confirm them against the primary text.

The Exemptions Do Most of the Work

The same action creates zero-rate subheadings, HTSUS 9903.79.02 through 9903.79.09, for listed uses. According to a customs broker’s summary of the proclamation, exempt uses include:

  • US data centers meeting a new-load threshold
  • Repair or replacement in the United States
  • US research and development
  • Startups
  • Non-data-center consumer electronics, including gaming, PCs, professional visualization, and automotive
  • Non-data-center civil industrial uses, including factory robotics and industrial machinery
  • US public-sector uses
  • Uses that contribute to the US technology supply chain

For a contract manufacturer building consumer, automotive, or industrial products, that list matters. A covered chip embedded in a qualifying end product may enter at 0% under the exemption subheading rather than 25%. The tariff lands hardest where the end use is a data center that falls outside the exemption, or where the paperwork to claim an exemption is missing.

Two limits are worth knowing. According to the same summary, drawback is not available for these duties, and goods admitted to a foreign trade zone must be in privileged foreign status and pay duty on entry for consumption. A contract manufacturer that relies on duty deferral should check whether its inventory qualifies.

What Changed After January

The proclamation contained a built-in checkpoint: a July 1, 2026 date by which an update on data-center chips would determine whether tariff changes were needed. We found no public announcement of a decision at that checkpoint. That is an absence in our search, not confirmation that nothing happened, so check Federal Register and Commerce notices before relying on it.

Reporting since then points toward a possible expansion, though sources conflict. One outlet reported on September 2, 2026 that Commerce Secretary Howard Lutnick had confirmed plans for broader semiconductor tariffs, with relief tied to commitments to manufacture chips in the United States. Another account and a Commerce spokesperson’s statement said there were no announcements. We treat expansion as possible and unconfirmed. Industry sources also told Politico that the administration was less receptive to broad end-use exemptions, which, if true, would remove the protection on which contract manufacturers currently rely. That claim is second-hand and unverified.

A separate action is easier to document. A proclamation dated August 6, 2026 imposed a 15% Section 232 tariff on certain polysilicon derivatives, including solar cells and certain semiconductor devices, effective December 4, 2026, according to law-firm and trade-press summaries. Buyers of solar-related electronics should check whether their classifications fall within it. For policy context, the Section 301 forced-labor tariffs that took effect July 24, 2026 reportedly exclude semiconductors and other goods already under Section 232, per customs-advisory summaries.

What Contract Electronics Buyers Should Do

Classify at the chip level. Ask your contract manufacturer for the bill of materials with HTS classifications and the technical parameters of any advanced computing parts. If no component approaches the parameters, your exposure to the 25% action is likely nil today.

Confirm who files and under which subheading. If a covered chip is present, determine whether the importer of record is claiming an exemption under 9903.79.02 through .09 and what documentation supports it. Entries must report each Chapter 99 number separately, ahead of the primary classification.

Write the duty allocation into the contract. If expansion arrives, the cost lands wherever the contract says it does. A clause assigning new Section 232 duty to a named party, with notice and a recalculation basis, matters more than any forecast.

Watch two dates. December 4, 2026 for the polysilicon derivatives, and any Commerce announcement on a second phase of the semiconductor action. The proclamation also left room for tariff offsets for companies investing in US capacity, so sourcing decisions tied to a supplier’s US investment plans may change the effective rate.

The practical lesson is that the 25% label overstates today’s exposure for most contract electronics buyers and understates the risk of a policy change. Verify the parameters, document the end use, and keep the contract language ready.

Sources: Presidential proclamation of January 14, 2026 (Proclamation 11002) as summarized by GHY, White and Case, Thomson Reuters, and the ICPA Section 232 tracker (updated October 12, 2026); Federal Register citation not confirmed in the sources we could access. The September 2 expansion report, the Politico claim, the polysilicon action, and the Section 301 exclusions come from news and law-firm summaries and should be verified.