The US president says he is considering providing relief to automakers when adjusting their supply chain.
US President Donald Trump plans to introduce tariffs on semiconductors and drugs, even as he unveils the possibility of a respite from his job in the automotive industry.
With the latest gust of winds in Monday’s trade announcement, the Trump administration launched an investigation into the national security impact of importing products and related products containing ingredients from chip manufacturing equipment and pharmaceuticals.
Probe follows Trump’s statement over the weekend that he will announce details of new tariffs on semiconductors within days after his management exempts chips and other high-tech items from the “mutual” tariffs announced on April 2.
The investigation is the latest trade-related probe launched by the United States under section 232 of the Trade Expansion Act, which the Trump administration also uses to scrutinize the imports of copper, wood, steel and aluminum.
Semiconductors are essential for the manufacture of almost all modern electronic devices.
The US relies heavily on imports of semiconductors from Asia, particularly from Taiwan, but Trump, like his predecessor, Joe Biden, is urging companies to make more chips at home.
In an announcement welcomed by the White House as an example of Trump’s trade policy implementation, chip giant Nvidia said Monday that it will spend up to $500 million to build an artificial intelligence supercomputer on US soil for the first time.
Trump’s move to new tariffs on tips and drugs has boosted the prospect of fresh disruption in businesses and financial markets around the world, shaking by the US president’s midway announcements on trade.
Last week, after announcing a 90-day suspension for most of his “mutual” tariffs on dozens of trading partners, Trump raised his import obligations from China to 145%.
China slapped US imports with 125% tariffs, promising that if Washington continues to escalate the trade war, it will “fight to the end.”
Financial markets and businesses are waiting for signs that Trump’s tariffs will be watered down or dropped completely if the administration can draw concessions from trading partners.
Trump’s top economic adviser Kevin Hassett said in an interview with Fox Business on Monday that authorities have made “surprising” advances in negotiations with US trading partners and have received “surprising offers” from more than 10 countries.
Hassett did not specify which country the US was making progress.
On Monday, Trump proposed that automakers could provide some relief from 25% tariffs on vehicles and auto parts, giving them time to coordinate their supply chains.
“I’m looking for something to help some of the auto companies that are switching to parts made in Canada, Mexico and elsewhere. They’re going to make them here, so I’ll need some time,” Trump told White House reporters.
“I’m a very flexible person. I won’t change my mind, but I’m flexible and you have to be,” Trump added.
US stocks on a roller coaster amid Trump’s announcement of tariffs rose Monday, with the benchmark S&P 500 and high-tech Have Nasdaq Composite rising by 0.79% and 0.64%, respectively.
Asian markets rose on Tuesday morning, with Japan’s Japan 225 and South Korea’s Kospi rising by 1.16% and 0.67% at 02:00 GMT, respectively.