Trump intends to impose 25% tariffs on automobiles and chips starting April 2 | Carscoops

      Details regarding the recently announced tariffs have not yet been disclosed, but they now encompass semiconductor chips and pharmaceuticals.

      A proposed 25% tariff on automobiles could transform global trade, affecting supply chains and expenses.

      This policy aims to promote the production of these items within the United States.

      Additional information regarding the tariffs will be shared on April 2, which will specify the impacted products and countries.

      In a decision that some automotive CEOs, including Ford's Jim Farley, might view as disordered, President Donald Trump has suggested implementing a 25% tariff on imported goods, including cars, starting on April 2. While he did not specify which countries would be targeted, he expanded the possible range to incorporate semiconductor chips and pharmaceuticals—both of which he hinted might incur even higher tariffs than vehicles.

      Trump stated that more details will be provided on April 2, indicating that the time leading up to that date presents an opportunity for companies to relocate production to the U.S. "When they come into the United States and they have their plant or factory here, there is no tariff. So we want to give them a little bit of a chance,” he remarked.

      Recently, the U.S. President has repeatedly threatened new tariffs against other countries. He has already enacted a 10% tariff on goods made in China, which led China to respond with a 10% tariff on American cars. Additionally, he has warned Canada and China of potential tariffs ranging from 50 to 100 percent on vehicles. In this context, a 25% tariff might not seem as severe.

      He claims that his motivation stems from perceived unfair trade agreements with other nations. For instance, the European Union imposes a 10% tariff on vehicle imports, while the U.S. only collects a 2.5% tariff on passenger cars. Conversely, there is a 'chicken tax' that applies a 25% tariff on all pickup trucks imported from outside the U.S. Trump has recently threatened the EU with a similar 10% tariff to equalize the situation.

      It is essential to note that the Trump administration has not specified which countries will be subjected to this new 25% tariff. It is possible that it could apply to the EU, Canada, and Mexico, or it may be more selective. Furthermore, Trump also alluded to potential tariffs on chips.

      Not long ago, a global chip shortage caused significant disruptions in the automotive sector, leaving cars waiting for weeks in a nearly complete state for just a few small components, including chips. Should semiconductor tariffs once again disrupt supply chains, automakers could find themselves in a familiar struggle, this time due to self-imposed challenges.