President confirms that the 25% tariffs on automobiles would be implemented on April 2, following reports from his cabinet officials about options for a series of import duties.

Key Takeaways:

• Trump announced plans to impose 25% tariffs on automobiles, pharmaceuticals, and semiconductor chips.
• The U.S. has criticized foreign markets like the EU for imposing higher tariffs on U.S. cars compared to the U.S.’s lower tariff rates.
• Tariffs on import of pharmaceuticals and semiconductor chips will begin at 25%, with the possibility of increasing over time.

U.S. President Donald Trump announced on Tuesday, February 18 that he intends to introduce significant tariffs on automobiles, pharmaceuticals, and semiconductor chips, marking a new chapter in his administration’s aggressive trade policy. The proposed tariffs, set at 25%, would target a wide range of imports, with pharmaceuticals and semiconductors potentially facing even higher duties.

The U.S. has long been critical of what it perceives as unfair treatment of American automotive exports abroad, particularly in markets like the European Union. Currently, the EU imposes a 10% tariff on U.S. car imports, compared to the U.S.’s relatively lower 2.5% tariff on passenger vehicles from most countries. However, the U.S. applies a much higher 25% tariff on pickup trucks imported from nations other than Canada and Mexico, creating a significant advantage for domestic auto manufacturers in Detroit.

The timing of the tariffs has caused significant concern in the global automotive sector. The proposal is reminiscent of similar threats made in 2018 when Trump’s administration conducted a national security investigation into auto imports. The inquiry found that the influx of foreign-made vehicles was weakening the domestic automotive industry, leading to a potential 25% tariff threat. Ultimately, the tariffs were never imposed, and the probe’s authority expired. However, Trump is now revisiting the issue, potentially using updated research to back new tariff measures.

Alongside the auto tariffs, Trump revealed plans for new duties on pharmaceuticals and semiconductor chips. These tariffs would start at 25% but could increase over time. Trump expressed a desire to give these industries time to set up U.S.-based production facilities, which could allow them to avoid the tariffs altogether. He hinted that several leading companies are expected to announce significant investments in the U.S. in the coming weeks, although no specific details were provided.

These new tariff threats are part of a broader strategy that has already seen Trump impose a 10% tariff on all Chinese imports, citing China’s failure to curb fentanyl trafficking.