The US president is considering providing assistance to automakers as they adapt their supply chains.
President Donald Trump of the United States has stepped up plans to implement tariffs on semiconductors and pharmaceutical goods, while also suggesting the possibility of a break from his tariffs affecting the auto sector.
In a series of trade-related announcements on Monday, the Trump administration initiated investigations into the national security ramifications of importing these items, including chip-manufacturing machinery and pharmaceutical ingredients.
These investigations come after Trump’s comments over the weekend, where he hinted at revealing details of new semiconductor tariffs in the coming days, following his administration’s earlier exemption of these chips and other advanced products from the “reciprocal” tariffs introduced on April 2.
These probes mark the latest initiatives by the US under Section 232 of the Trade Expansion Act, which the Trump administration has similarly leveraged to assess imports of copper, lumber, steel, and aluminum.
Semiconductors play a vital role in the production of nearly all modern electronic devices.
The US relies heavily on semiconductor imports from Asia, particularly Taiwan, although Trump, much like his predecessor Joe Biden, has been encouraging companies to increase domestic chip production.
In a development that the White House praised as a testament to Trump’s trade approach, semiconductor powerhouse Nvidia announced on Monday that it plans to invest up to $500 billion in producing its artificial intelligence supercomputers within the United States for the first time.
Trump’s inclination towards imposing new tariffs on semiconductors and pharmaceuticals introduces the potential for further disruption for businesses and global financial markets, which have already been unsettled by the president’s whirlwind announcements on trade.
Last week, after putting a 90-day halt on the majority of his “reciprocal” tariffs against various trade partners, Trump increased the import duties on Chinese goods to 145 percent.
In retaliation, China has imposed tariffs of 125 percent on US imports, vowing to “fight to the end” if Washington continues its trade escalation.
Businesses and financial markets are looking for indications that Trump’s tariffs might be reduced or eliminated if the administration can successfully negotiate concessions from its trade partners.
In a Monday interview with Fox Business, Kevin Hassett, the president’s chief economic advisor, claimed that officials were achieving “astonishing” progress in negotiations with trade allies and had received “amazing offers” from over 10 nations.
Hassett did not elaborate on which countries were involved in these negotiations.
On Monday, Trump indicated he might grant some automotive companies relief from his 25 percent tariffs on vehicles and auto parts to allow them time to modify their supply chains.
“I’m considering options to assist some of the auto manufacturers as they transition to parts produced in Canada, Mexico, and other regions, and they require a little time, since they plan to produce them here,” Trump told journalists at the White House.
“I’m a very flexible individual. I don’t often change my mind, but I am adaptable, and that’s necessary,” Trump remarked.
Following Trump’s tariff announcements, US stocks, which have been fluctuating dramatically, climbed on Monday, with the S&P 500 and the tech-focused Nasdaq Composite rising by 0.79 percent and 0.64 percent, respectively.
On Tuesday morning, Asian markets saw an upward trend, with Japan’s Nikkei 225 and South Korea’s KOSPI increasing by 1.16 percent and 0.67 percent, respectively, as of 02:00 GMT.
