US President Donald Trump has announced that tariffs of up to 25% may apply as soon as April 2 to imports from three major industries contributing to the US trade deficit: pharmaceuticals, autos, and semiconductors. This move puts more pressure on the already looming deadlines for tariffs on steel and aluminum imports.
The proposed tariffs are part of Trump’s ongoing efforts to address the trade deficit. The US has a significant trade deficit in autos, which surged to $305 billion last year. Pharmaceutical imports also contribute significantly to the deficit, with a surge to $139 billion in 2024. Meanwhile, semiconductor imports amount to $17 billion annually.
However, the implementation of these tariffs will have significant implications for industries and countries involved. Economists warn that if implemented, they could put Canada and Mexico on the brink of recession due to their massive trade deficit with the US.
Trump’s approach is designed to give US companies a chance to boost domestic production by implementing a phase-in period. However, experts are concerned about the impact on AI-related industries, which would see increased costs due to higher import taxes.
The situation highlights the complexity and uncertainty surrounding Trump’s trade policies. As markets continue to watch these developments closely, investors will be keenly monitoring any updates or announcements from the White House.
Source: https://www.investors.com/news/economy/trump-tariffs-autos-semiconductors-pharma-trade-deficits-tariff-deadlines