The 2026 tariff environment

United States trade measures now combine several mechanisms. Existing Section 301 tariffs on certain semiconductors from China reached 50 percent in 2025. In January 2026, the United States announced an immediate 25 percent Section 232 duty on specified advanced computing chips and derivative products when imports do not support defined US technology-supply-chain objectives. The measure includes exemptions for several uses, including qualifying data-centre deployment, research, start-ups, repairs and certain industrial or public-sector applications.

Treatment depends on product classification, origin, end use and the applicable programme. A headline tariff percentage is therefore not enough to determine the landed cost of a specific component.

Companies should obtain customs and legal advice for individual classifications. Insurance cannot correct a misclassified import declaration or replace compliance with tariff rules.

Direct and indirect cost effects

The direct effect is the duty paid on an imported product. The indirect effects can be larger. Suppliers may change prices, minimum order quantities or delivery terms. Manufacturers may redesign products around alternative chips, qualify additional suppliers or move assembly to another jurisdiction.

These changes create engineering, quality and working-capital costs. A lower-priced substitute may require testing and certification. Additional inventory can reduce interruption risk but increase the value accumulated at warehouses and in transit.

Finance and risk teams should model at least three scenarios: continued current treatment, a wider tariff scope and a supplier or route change. The analysis should include duty, freight, inventory, qualification, delay and lost-margin effects.

Supply-chain concentration remains the central risk

Tariffs are designed partly to change where production occurs, but semiconductor capacity cannot move quickly. Fabrication plants require substantial capital, specialised equipment, skilled labour and long construction and qualification periods.

During the transition, companies may remain dependent on a small number of fabrication facilities, packaging providers or equipment suppliers. The apparent diversity of direct suppliers can hide a common upstream dependency.

A useful supply-chain map should identify wafer fabrication, assembly, testing, key materials, manufacturing equipment and logistics nodes. It should also distinguish between a supplier that can be replaced commercially and a component that must be re-engineered or recertified.

Contract implications

Tariff changes frequently expose unclear contract language. Purchase and sales contracts should specify who bears new duties, how price adjustments work, which party controls origin documentation and what happens if a component becomes commercially impractical to import.

Force majeure clauses do not automatically solve the problem. A tariff may make performance more expensive without making it impossible. Change-in-law, hardship, price-adjustment and termination provisions should be reviewed together.

Companies should also align Incoterms with the intended allocation of duty, freight and risk. Operational practice must match the written term.

What insurance can and cannot cover

Traditional property and business-interruption policies normally require insured physical damage. A tariff increase, loss of margin or delay caused solely by a regulatory change is generally not physical damage and should not be assumed to be covered.

Insurance may still respond when an insured event damages a critical semiconductor facility, warehouse or shipment. Relevant covers can include:

• property damage and business interruption;
• contingent business interruption for named or qualifying suppliers;
• marine cargo and stock-throughput insurance;
• trade credit insurance for customer insolvency;
• political risk or contract frustration for qualifying cross-border exposures;
• cyber insurance for technology-driven disruption;
• product recall or product liability where substituted components create defects.

The wording must be checked carefully. Supplier extensions, territorial scope, waiting periods, sublimits and exclusions determine whether a real loss is recoverable.

Risk-management priorities

Technology manufacturers and semiconductor-dependent businesses should:

1. Map critical components beyond tier-one suppliers.
2. Validate tariff classification, origin and end-use documentation.
3. Quantify inventory accumulation created by buffer-stock strategies.
4. Review contracts for duty allocation and change-in-law provisions.
5. Test alternative chips before a disruption occurs.
6. Compare supplier dependencies with contingent business-interruption coverage.
7. Update declared values to reflect higher landed and replacement costs.

Conclusion

Semiconductor tariffs are reshaping investment and sourcing, but they do not remove concentration risk overnight. For many businesses, the transition creates a period of higher cost, larger inventories and more complicated supplier dependencies.

The appropriate response combines trade compliance, procurement, engineering, finance and insurance. Insurance should protect defined loss scenarios, while contractual and operational controls address exposures that cannot be transferred.

Next step: Request a technology supply-chain and insurance coverage review.