Trump Proposes 25% Tariffs on U.S. Imports of Autos, Pharmaceuticals, and Semiconductors
U.S. President Donald Trump has escalated his trade strategy, threatening to impose 25 percent tariffs on imported automobiles, as well as similar or even higher duties on pharmaceuticals and semiconductors.
Since taking office in January, Trump has introduced a wide array of tariffs on major U.S. trading partners, asserting that the levies are necessary to address unfair trade practices. At times, he has used these threats as leverage to influence policy decisions.
Trump recently announced 10 percent tariffs on all imports from China, along with 25 percent duties on steel and aluminum.
Speaking from his Mar-a-Lago resort in Florida, he told reporters that the auto industry tariff would likely be “around 25 percent,” with further details to be revealed by April 2. When asked about the proposed tariffs on pharmaceuticals and chips, Trump said, “It’ll be 25 percent and higher, and it will rise substantially over the next year.”
The President added that he wanted to give companies affected by the tariffs time to relocate their operations to the U.S., noting that several major firms had expressed interest in returning.
He emphasized that these companies could avoid tariffs altogether by establishing factories in the U.S. “When they come into the United States and build their plants or factories here, there will be no tariff. We want to give them some time to do that,” Trump explained.
However, experts have cautioned that the burden of tariffs often falls on U.S. consumers, who may face higher prices for imported goods rather than foreign exporters absorbing the cost.
Currently, about 50 percent of cars sold in the U.S. are domestically manufactured, while imports primarily come from Mexico, Canada, Japan, South Korea, and Germany.
Asia’s Response
Trump’s tariff threats have been met with caution in Asia, home to several major suppliers of automobiles and semiconductors to the U.S. Yoshimasa Hayashi, Japan’s chief government spokesperson, said Japan had raised concerns with the U.S. government regarding auto tariffs, given the significance of Japan’s auto industry.
He added that Japan would take appropriate actions after carefully reviewing the details of the proposed measures.
Taiwan, a key player in semiconductor manufacturing, has also responded cautiously to Trump’s threats, particularly after Trump accused Taiwan of undermining the U.S. chip industry.
Taiwan’s Economic Ministry stated that it would monitor the situation closely and continue to assist local industries. Taiwan had previously indicated plans to increase its investment in the U.S. to avoid the impact of tariffs.
EU Trade Dynamics
Trump also expressed satisfaction with the European Union’s decision to lower its tariffs on cars to match the U.S. rate. “The EU had a 10 percent tax on cars, and now it is 2.5 percent, which is exactly the same as ours. If everyone did that, we’d all be on the same playing field,” Trump said.
He continued to criticize the EU, claiming the U.S. faces a $350 billion trade deficit with the region, which he argued does not buy enough U.S. cars or agricultural products.
Despite these complaints, the U.S. has seen a trade surplus in services with the EU, amounting to $109 billion in 2023, according to European Commission data.
European Commissioner for Trade and Economic Security, Maros Sefcovic, arrived in Washington on Tuesday to meet with U.S. Commerce Secretary Howard Lutnick and White House Trade Representative Jamieson Greer to discuss trade relations.
