U.S. President Donald Trump has announced plans to introduce a 25% tariff on automobile imports, along with similar duties on semiconductors and pharmaceuticals.
Trump stated on Tuesday that the auto tariffs would be imposed “in the neighborhood of 25%,” reinforcing his longstanding complaints about what he perceives as unfair treatment of U.S. automotive exports, Reuters reports.
The European Union currently levies a 10% duty on vehicle imports, compared to the 2.5% tariff imposed by the U.S. on passenger cars.
However, the U.S. already maintains a 25% tariff on pickup trucks imported from countries outside of North America, a measure that has been a boon for domestic automakers.
Trump said these new levies could take effect as soon as April 2, following reports from his cabinet outlining options for a broader import tariff strategy. The proposed tariffs are expected to significantly impact international automakers, particularly European and Asian manufacturers, while incentivizing companies to increase domestic production.
Pharmaceutical and Semiconductor Tariffs Also in Play
Beyond automobiles, Trump revealed that tariffs on pharmaceuticals and semiconductor chips would start at 25% and could increase over the course of the year. He did not specify an exact date for their implementation but emphasized that the measures aim to encourage manufacturing within the United States.
The U.S. pharmaceutical industry relies heavily on foreign imports, particularly from China and India, for active pharmaceutical ingredients (APIs). Similarly, the semiconductor sector is deeply integrated into global supply chains, with major chip production hubs located in Taiwan, South Korea, and China. These tariffs could disrupt supply chains and potentially drive up costs for consumers and businesses alike.
Escalating Trade Tensions with the EU and Other Partners
Trump’s announcement comes ahead of a scheduled meeting in Washington between EU trade chief Maros Sefcovic and top U.S. officials, including Commerce Secretary Howard Lutnick, Trump’s nominee for U.S. Trade Representative Jamieson Greer, and National Economic Council Director Kevin Hassett. The discussions are expected to address the growing trade frictions and explore potential resolutions.
Despite Trump’s claim that the EU has signaled a willingness to lower tariffs on U.S. cars, European lawmakers have denied making any such concessions. Trump, however, remains firm in his stance, stating that he will continue to push for increased U.S. exports to Europe and other markets.
Expanding Trade War Measures
Since taking office, Trump has introduced a series of tariffs aimed at reducing trade imbalances and pressuring foreign governments to renegotiate trade agreements. Last month, he imposed a 10% tariff on all Chinese imports, citing Beijing’s failure to curb fentanyl trafficking. Additionally, he has announced—though later delayed—a 25% tariff on goods from Mexico and non-energy imports from Canada.
On March 12, Trump’s administration is set to implement 25% tariffs on all imported steel and aluminum, eliminating previous exemptions for key allies, including Canada, Mexico, and the European Union. These tariffs will also apply to hundreds of downstream products, from electrical conduit tubing to industrial machinery components.
