Trump plans to impose a 25% tariff on cars, medicines and chips

U.S. President Donald Trump said on Tuesday that he intends to impose tariffs of "around 25%" on cars and similar tariffs on imports of semiconductors and pharmaceutical products, the latest in a series of measures that threaten to upend global trade, reports Reuters, writes UNN.

Details

On Friday, Trump said the car tariffs would take effect on April 2, the day after members of his administration are to provide him with reports outlining options for a range of import tariffs.

Trump has long railed against what he calls unfair treatment of U.S. auto exports in foreign markets.

The European Union, for example, collects a 10% tariff on imported vehicles, four times the 2.5% U.S. tariff on passenger cars. However, the U.S. imposes a 25% tariff on pickup trucks from other countries, except Mexico and Canada, a tax that makes vehicles highly profitable for Detroit automakers.

The EU's trade chief, Maros Sefcovic, will meet with U.S. counterparts - Commerce Secretary Wilbur Ross, Trump's nominee for U.S. Trade Representative Jaymie Greiser, and National Economic Council Director Kevin Hassett - in Washington on Wednesday to discuss the various tariffs threatened by Trump.

Responding to a question about whether the EU can avoid the reciprocal tariffs it proposed last week, Trump repeated his claim that the EU has already signaled it will lower its tariffs on U.S. cars to the U.S. level, although EU lawmakers deny this.

He said he is pressing EU officials to increase imports of cars and other goods into the United States.

On Tuesday, Trump told reporters at his Mar-a-Lago estate in Florida that industry tariffs on pharmaceutical drugs and semiconductor chips would also start at "25% or higher", substantially increasing over the course of a year.

He did not give dates for the announcement of these tariffs and said he would like to give some time for drugmakers and chipmakers to build factories in the United States so they can avoid the tariffs.

Trump said he expects some of the world's largest companies to announce new investments in the United States in the coming weeks. He provided no further details.

A 25% tariff on imported cars would upend the global auto industry, which is already suffering from uncertainty caused by Trump's tariff drama.

A similar drama played out in 2018 and 2019 during Trump's first term, when the Commerce Department conducted a national security investigation into auto imports and found that it had weakened the domestic industrial base. At the time, Trump threatened to impose 25% tariffs on cars, but ultimately took no action, leading to the expiration of the tariff investigation's authorities.

But some of the studies used for the 2018 investigation could be reused or updated as part of new efforts on car tariffs.

Supplement

After his inauguration four weeks ago, Trump imposed a 10% tariff on all imports from China, in addition to existing duties, because China did not stop the trade of fentanyl. He also announced, and then postponed for a month, a 25% tariff on goods from Mexico and non-energy imports from Canada.

He also set March 12 as the effective date for a 25% tariff on all imported steel and aluminum, eliminating exemptions for Canada, Mexico, the European Union and other trading partners. Trump also announced that these tariffs would apply to hundreds of imported steel and aluminum products, ranging from electrical conduit pipes to bulldozer blades.

Last week, he directed his economic team to develop plans to impose reciprocal tariffs that would match the tariff rates for each product in each country.