We reported earlier this week on the possibility of President Donald Trump imposing tariffs on all automobiles imported into the U.S. starting in April. Now, according to Reuters, new comments from Trump on Tuesday tell us that such tariffs would be “in the neighborhood of 25 percent.” The president is still planning on such tariffs kicking in as soon as April 2nd, pending reports from his cabinet outlining options for various import duties.
Chevy BrightDrop assembled at CAMI Assembly in Canada
Additionally, Trump is now calling for tariffs on imported pharmaceuticals and semiconductor chips starting at “25 percent or higher.” However, he didn’t specify a timeline for these tariffs, saying he wanted to give manufacturers time to bring production to the United States and avoid tariffs.
Semiconductor tariffs could disrupt costs for U.S.-built cars since the global chip industry is dominated by Asian nations. Taiwan alone, estimated to manufacture about 60 percent of the world’s chips, is a major source of U.S. semiconductor imports. China and South Korea also produce a significant portion of the world’s semiconductors.
However, a major increase in U.S. semiconductor production is already underway. The CHIPS and Science Act, signed into law by President Biden in 2022, incentivized semiconductor manufacturing in the States, with firms like Intel, Micron, Samsung, and others receiving billions in subsidies to ramp up American chip production. In addition to investments that have already been announced, Trump told reporters that some of the world’s biggest tech companies will announce new investments in the U.S. in the coming weeks.
Chevy Blazer EV assembled at the GM Ramos Arizpe plant in Mexico
It’s still unclear what potential tariffs on all automobiles imported to the U.S. would mean for cars assembled in Mexico and Canada. According to the United States-Mexico-Canada Agreement (USMCA), which has been in effect since 2020, if a vehicle is determined to have at least 75 percent of its parts originating from the three North American countries, it is not subject to tariffs. However, Trump’s aggressive tariff agenda could change that, with his threats of 25 percent tariffs on all goods imported from Canada and Mexico, which are currently on hold.
