President Donald Trump said he would likely impose tariffs on automobile, semiconductor and pharmaceutical imports of around 25 per cent, with an announcement coming as soon as April 2nd in a move that would represent a dramatic widening of the president’s trade war.
Mr Trump has previously announced 25 per cent tariffs on steel and aluminium that are set to take effect in March. Tuesday’s comments are his most detailed yet in specifying other sectors to be hit with fresh barriers if implemented.
“I probably will tell you that on April 2nd, but it’ll be in the neighbourhood of 25 per cent,” Mr Trump told reporters at his Mar-a-Lago club when asked about his plan for car tariffs.
Asked about similar levies on pharmaceutical drugs and semiconductor chips, the president said: “It’ll be 25 per cent and higher, and it’ll go very substantially higher over a course of a year.” Mr Trump said he wanted to give companies “time to come in” before announcing new import taxes.
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His comments come just in advance of a meeting on Thursday with the pharmaceutical industry’s biggest lobbying group, according to people familiar with the matter, part of an effort to persuade him to scale back some of his predecessor’s policies.
The meeting with the Pharmaceutical Research and Manufacturers of America (PhRMA), and CEOs of several big drugmakers, including Pfizer, Merck (MSD), GlaxoSmithKline and Novartis comes as the industry hopes to win the new administration’s support for changes to a law that allows the federal government to negotiate certain drug prices.
New levies on automobiles would have sweeping effects on the industry. The roughly eight million passenger cars and light trucks brought into the US last year accounted for about half of US vehicle sales. European carmakers including Volkswagen and Asian companies including Hyundai would be among the most affected.
Globally, the countries most exposed to the most recent announcement include Mexico and South Korea, where exports of passenger cars to the US are equal to 2.4 per cent and 1.8 per cent of gross domestic product respectively, according to Bloomberg Economics. When it comes to chips, Malaysia and Singapore are among the most exposed.
Car making powerhouses South Korea and Japan are also in the line of fire, particularly if recent levies are stacked with prior ones. J
The European Union’s top trade official is travelling to Washington this week to meet counterparts for a last-ditch effort to avoid getting hit by duties in April. Mr Trump, however, has signalled there’s not much any one country can do to get out from the tariffs if he views the trading relationship as unbalanced.
Other countries have promised swift retaliation once Mr Trump’s tariffs are applied and said they’d target politically sensitive goods that are made in Republican states.
Meanwhile, the US Senate voted on Tuesday 51-45 to confirm President Trump’s nominee Howard Lutnick, the billionaire chairman and CEO of Wall Street firm Cantor Fitzgerald, to run the Commerce Department.
Mr Lutnick told senators he has advised Trump to pursue across-the-board tariffs country-by-country to restore “reciprocity” to America’s trading relationships. – Bloomberg/Reuters
