CNN
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President Donald Trump said Tuesday that he plans to impose a tariff of about 25% on automobile imports, not just semiconductors and drugs shipped to the US on April 2nd.
Trump recently enacted a 10% overall tariff on goods coming from China and a 25% tariff on all steel and aluminum imports.
Regarding the tariffs on semiconductor chips and drugs, he told reporters at a resort in Mar Arago, Florida, that he plans to ultimately increase the rates more.
“It’s going to be significantly higher on a one-year course,” he said. However, he added that potentially affected companies would like to give time to bring their factories to America to avoid tariffs.
“We want to give them a little chance,” he said.
The revelation comes days after Trump ordered an investigation into other countries’ tax and tariff policies. The Secretary of Commerce said last week.
Trump’s latest announcement highlights his driving force for a more “balanced” trade with foreign markets and a re-fire of strategic industries. He has long criticised what he regards as an unfair foreign treatment of US exports.
The sudden new tariffs can have a wide range of effects beyond the specific industries in which taxes are collected, and are hurting prices and businesses with higher prices, with higher costs, and economists and Industry experts warn.
Experts say consumers are expected to feel most burns from the new import tax on cars, as the price of cars can jump thousands of dollars. Almost half of last year’s sales of vehicles in the US, including cars and light trucks, were imported from overseas.
The president said whether cars manufactured in Mexico and Canada will be spared under the free trade agreements that Trump signed during his first term, and whether the 25% tariff will apply to all countries in full. No further details were provided.
Like AI Chipmaker Nvidia, US companies dominate the semiconductor industry, but over the past decades, chip manufacturing has long been outsourced to Asia for cost and technical reasons. Nvidia declined to comment.
Taiwan Semiconductor Manufacturing Company (TSMC) has emerged as the world’s largest contract chip producer, pioneering a model of contract chip making and manufacturing chips for others without their name. .
TSMC told CNN that the Arizona chip-making plant announced in 2020 during Trump’s first term was going well as planned, but declined to comment further.
Trump has repeatedly accused Taiwan of stealing the American chip industry, claiming that experts are fighting.
Details remain unknown, but new semiconductor tariffs could mostly hurt Asian chip giants, including manufacturing plants such as TSMC, South Korea’s Samsung and SK Hynix, which remain primarily in Asia. The threat of new import taxes could also speed up the steps these companies have taken to establish and expand stores in the US.
Regarding the pharmaceutical industry, the US purchased more than $176 billion in drugs and related products in 2023, making it the largest importer of medicines that year, according to US trade data.
European, Indian and Chinese companies could be the most hits. In 2023, Ireland accounted for 20.4% of drug imports, followed by 10.8% from Germany, 8.6% from Switzerland, 6.2% from India and 3.4% from China.
