Trump Plans 25% Tariffs on Autos, Pharmaceuticals, and Chips

Image Credit: MSN

U.S. President Donald Trump announced on Tuesday that he plans to impose auto tariffs of approximately 25%, along with similar duties on semiconductor and pharmaceutical imports. This move is part of a series of actions aimed at reshaping global trade.

Trump revealed that the tariffs on automobiles would likely be implemented on April 2, the day after his cabinet members are set to deliver reports on various import duties. The president has long criticized what he views as the unfair treatment of U.S. car exports in foreign markets. For instance, the European Union imposes a 10% tariff on vehicle imports, while the U.S. charges a 2.5% tariff on passenger cars but levies a 25% tariff on pickup trucks from non-Mexican and non-Canadian countries, making these vehicles highly profitable for U.S. automakers.

In response to Trump's proposed tariffs, EU trade chief Maros Sefcovic will meet with U.S. officials, including Commerce Secretary Howard Lutnick and Trump's trade representative nominee Jamieson Greer, to discuss the potential impact of these measures.

Trump also announced plans to introduce 25% or higher tariffs on pharmaceuticals and semiconductor chips, with the rates expected to rise over the next year. While he didn’t provide a start date, he mentioned giving time for manufacturers to establish U.S.-based factories to avoid the tariffs. Trump is anticipating announcements from major global companies regarding new investments in the U.S.

Since taking office, Trump has already imposed a 10% tariff on all Chinese imports, a response to China's failure to address fentanyl trafficking. He has also announced 25% tariffs on steel and aluminum imports from various countries, including Canada, Mexico, and the EU, and set a March 12 date for these duties to take effect.

Trump has further directed his economic team to devise plans for imposing reciprocal tariffs, matching the import duties of other countries on a product-by-product basis.

The proposed 25% auto tariff would significantly impact the global auto industry, which is still reeling from uncertainty related to Trump's earlier tariff actions. In 2018 and 2019, the Commerce Department investigated auto imports for national security reasons, with Trump threatening similar car tariffs at the time. While those plans were ultimately shelved, some of the research from that investigation may be revisited in the new tariff efforts.

Paraphrasing text from "Reuters" all rights reserved by the original author