Trump Promises 25% Tariffs on Chips, Autos, and Drugs

President Trump has promised to increase US manufacturing and competitiveness by enacting 25% tariffs on electronics, pharmaceuticals, and automobiles.

The next step in US President Donald Trump’s efforts to restructure global trade was his announcement on Tuesday that he will apply tariffs on auto imports “in the neighborhood of 25%,” along with equivalent penalties on imports of semiconductors and pharmaceuticals.

Trump told reporters at his Mar-a-Lago resort in Florida that sectoral taxes on semiconductor chips and pharmaceuticals would likewise begin at “25% or higher” and might increase significantly over the course of a year.

In order to allow businesses time to set up US facilities and escape the tariffs, he did not provide a timetable for their implementation.

Trump, who frequently complains about what he sees as unfair treatment of US auto exports, stated that the vehicle tariffs might go into force as early as April 2.

This would come after reports detailing alternatives for different import duties from his cabinet, which were expected on April 1.

“The European Union, for example, collects a 10% duty on vehicle imports, four times the US passenger car tariff rate of 2.5%,” Trump stated, echoing his long-standing criticism of trade imbalances throughout the world.

Even while the US presently levies a 25% tariff on imports of pickup trucks, with the exception of those from Canada and Mexico, Trump has advocated for applying similar protectionist policies to the whole auto industry.

Trump’s choice for US Trade Representative Jamieson Greer, National Economic Council Director Kevin Hassett, and Commerce Secretary Howard Lutnick are among the US officials that EU trade director Maros Sefcovic is scheduled to meet with in Washington on Wednesday. Potential negotiations and the planned tariffs will be the main topics of discussion.

In response to a question about whether the EU could avoid the reciprocal duties he suggested last week, Trump maintained that European leaders had already expressed a desire to reduce their tariffs on US automobiles. EU politicians have refuted such promises, though.

The Tariff War is getting wider.

Due to Beijing’s inability to stop the trafficking of fentanyl, Trump has been pursuing tariffs since his inauguration four weeks ago, and he has already imposed a 10% tax on all Chinese imports.

He also declared 25% duties on Canadian imports of non-energy items and Mexican commodities, which were ultimately postponed for a month. On March 12, a 25% duty on imported steel and aluminum will also go into force, removing exemptions for the EU, Canada, Mexico, and other trading partners.

Trump’s economic team has been instructed to create a reciprocal tariff approach that would match each nation’s tariff rates product-by-product, a move that could have significant effects on global supply markets.

An already unstable global auto sector would undergo a significant change if auto imports were subject to a 25% tariff.

The Commerce Department’s national security inquiry of auto imports, which found they undermined the US industrial base, echoed similar claims made during Trump’s first term.

Despite his considerations in 2018 and 2019, Trump decided against enacting the tariffs, allowing the tariff authority from that investigation to expire.

As part of Trump’s reinvigorated automobile tariff initiative, some of the 2018 investigation’s findings may now be reviewed or revised.

Although he declined to elaborate, Trump also alluded to impending significant investment announcements from top companies in reaction to his tariff policy.