The Trump administration has begun investigating the impact of pharmaceutical and semiconductor imports on national security, likely setting the stage for tariffs on the sectors.

The Department of Commerce's pharma investigation covers generic and non-generic drugs, active pharma ingredients, and derivative products. The semiconductor probe covers items including leading-edge chips, chipmaking equipment, silicon wafers, and "downstream products that contain semiconductors."

The probes will look into current and projected demand for the pharma and semiconductor products, the ability of domestic production to meet demand, and potential for export restrictions. The chip probe will also assess "the ability of foreign nations to weaponize their control over semiconductors and SME supply chains."

The investigations have been initiated under Section 232 of the Trade Expansion Act of 1962, which allows the president to adjust imports if they are deemed to be a threat to national security. 

Section 232 probes must be completed within 270 days of initiation. Public comments on the investigations will be open 21 days after Wednesday.

The investigations follow the Trump administration exempting chips, smartphones, computers and other electronics imports from the 145% tariffs for Chinese imports. Pharma and semiconductor imports are also exempt from the baseline 10% tariff that went into effect on April 5.

Pharma stocks to watch: Merck (MRK), J&J (JNJ), Eli Lilly (LLY), Novartis (NVS), Novo Nordisk (NVO), AstraZeneca (AZN), 

Semiconductor stocks to watch: Taiwan Semiconductor (TSM), ASML (ASML), Nvidia (NVDA), Samsung (OTCPK:SSNLF).