Trump Considers 25% Tariffs on Cars, Semiconductors, and Pharmaceuticals Early April

U.S. President Donald Trump announced on Tuesday that he is considering imposing tariffs of 25% on automotive imports, as well as similar duties on pharmaceuticals and semiconductor chips, in the latest escalation of his trade policies aimed at reshaping global trade relations.

Trump stated that the automotive tariffs would be set in the neighborhood of 25%, with the possibility of further increases over the course of the year. He emphasized that the aim is to give companies time to relocate operations to the U.S., stating, It'll be 25% and higher and it'll go very substantially higher over the course of the year for chips and pharmaceuticals.

The President also hinted that he would provide final details on the automotive tariffs by April 2, a date he had previously indicated for their implementation. It'll probably be April 2, Trump confirmed, when asked about the specifics.

This announcement marks the latest chapter in Trump's efforts to alter America's trading relationships, which already include a 25% tariff on steel and aluminum imports set to take effect next month, as well as a 10% levy on Chinese goods. Trump also delayed new tariffs on Mexico and Canada after reaching agreements with the U.S.'s North American neighbors earlier this month.

Trump has long criticized what he sees as unfair trade practices, particularly in the automotive sector. Currently, the European Union imposes a 10% tariff on U.S. car imports, while the U.S. collects a 2.5% tariff on passenger vehicles but applies a 25% duty on pickup trucks. Trump has repeatedly argued that the EU's trade practices are imbalanced, calling the bloc very unfair to us.

On Tuesday, Trump met with European Union trade commissioner Maroš Šefčovič, who was in Washington for talks to prevent further escalation. Trump reiterated his complaints about the EU's trade deficit with the U.S. and insisted on reciprocal tariffs. The EU has been very unfair to us, Trump said. They don't take our cars, they don't take our farmed products, they don't take almost anything, they take very little. And we're going to have to straighten that out.

Despite Trump's comments, the European Commission responded that no deal had yet been reached regarding the reduction of car import tariffs. No specific offer on reducing tariffs has been made by either side, the Commission said. Any tariff reductions must be mutually beneficial and negotiated within a fair and rules-based framework.

In addition to automotive tariffs, Trump is also targeting the pharmaceutical and semiconductor industries, with both sectors facing the prospect of a 25% tariff or higher. It'll be 25% or higher, and it'll go substantially higher over the course of the year, Trump said, adding that the new duties would encourage drug and chip makers to move production to the U.S. in order to avoid the levies.

While Trump has expressed confidence in the economic benefits of these tariffs, the auto industry could face significant disruption, as such tariffs would likely reshape global supply chains. The potential impact on automakers is a concern, especially as the global auto industry is already grappling with uncertainty from previous trade moves.

In a similar move during his first term, Trump ordered a national security investigation into auto imports, threatening a 25% tariff at the time, though the plan was ultimately not enacted. However, some of the research from that investigation may be revisited and updated for the current round of tariff discussions.

As Trump seeks to press the EU on trade, he also looks ahead to potential new investments in the U.S. "I expect some of the biggest companies in the world to announce new investments in the United States in the next couple of weeks," he stated, though he did not provide further details.