WASHINGTON-President Donald Trump signaled on Monday that he will soon announce additional tariffs directed to computer chips and imported pharmaceuticals, while suggesting that he could also relax tariffs about imported cars and automotive parts.
The change strategy highlighted the complications and contradictions in the president’s commercial agenda, which has stirred the markets and scared the companies Trump tries to persuade investing in the United States.
For the second day, Trump implied that he would soon impose new tariffs on semiconductors, seeking to increase the domestic production of a vital component in electronics, cars, toys and other products.
“The bigger the fare, the faster they come,” Trump said on Monday, citing other import taxes he imposed on steel, aluminum and cars.
The United States depend strongly on chips imported from Taiwan and other Asian countries, a dependence that both Democrats and Republicans have described as a great risk to national security.
The president also said he was preparing new rates on pharmaceutical imports, arguing that many vital drugs are imported from Ireland and other countries, not produced in the United States.
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“We no longer manufacture our own medicines,” said Trump.
However, he also signaled that he could offer certain companies relief from their tariffs, as he recently did for imports of electronics, marking a break with his previous insistence on not spare entire industries.
The president said he was “analyzing something to help some automakers, where they are changing to parts manufactured in Canada, Mexico and other places.” He added, “And they need a little time because they have to make them here.” General Motors, Ford and Stellantis actions climbed after their comments.
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“I’m a very flexible person. I don’t change my mind, but I’m flexible,” Trump said on Monday when asked about possible exemptions. He added that he had talked to Apple’s CEO Tim Cook and the “helped” recently.
The president announced a “reciprocal” global tariff program on April 2, including high tariffs about countries that make many electronics, such as Vietnam. But after turmoil in the title market, he suspended these global tariffs for 90 days so that his government could carry out business negotiations with other countries.
These import taxes added to other fares that Trump imposed on various sectors and countries, including a 10% rate on all US imports, a 25% tariff on steel, aluminum and cars, and a 25% tariff over many Canada and Mexico products. In total, measures increased US tariffs to levels not seen in more than a century.
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Amid a dispute with China, Trump last week increased rates on Chinese imports to a minimum of 145%, before exempt smartphones, laptops, TVs and other electronics on Friday. These products represent about a quarter of China’s US imports.
The administration argued that the measure was simply a “clarification,” saying that these electronics would be included in the scope of the National Chip Security Investigation.
But industry executives and analysts questioned whether the actual motivation of management could have been avoiding a negative reaction linked to a sharp increase in the prices of many consumer electronics – or helping technology companies like Apple, who recently sought the White House to argue that tariffs would harm them.
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The new semiconductor rates would be issued under section 232 of the 1962 Trade Expansion Law, which allows the president to impose tariffs to protect US national security. The president has already used this legal authority to issue tariffs on steel, aluminum and imported cars. Administration is also using this authority to conduct investigations on wood and copper imports, and it is expected to start investigating pharmaceuticals soon.
Kevin Hassett, director of the White House National Economic Council, reported on Monday that chip tariffs were necessary for national security.
“The example I like to use is: If you have a cannon, but you are getting the cannon candy of an opponent, then, if there is any kind of action, you can run out of cannon bullets,” he said. “And therefore, you can put a fare in the cannon bullets.”
Trump argued that chips rates will force companies to transfer their factories to the United States.
Some technology companies have responded to the president’s requests to build more in the United States. Taiwan Semiconductor Manufacturing Co., the world’s largest chip manufacturer, announced at the White House in March that it would spend $ 100 billion in the United States over the next four years to expand its production capacity.
Apple has also announced that it will spend $ 500 billion in the United States over the next four years to expand facilities across the country.
On Monday, Nvidia, chip manufacturer, announced that it will produce supercomputers for fully manufactured artificial intelligence in the United States. Over the next four years, the company said it will produce up to $ 500 billion in AI infrastructure in the United States in partnership with TSMC and other companies.
“The world’s AI infrastructure engines are being built in the United States for the first time,” said Jensen Huang, CEO of Nvidia, in a statement.
The White House released the news in an announcement that credited the president.
“It’s the Trump effect on action,” the statement said. “Bringing these industries to the United States is good for the American worker, good for the American economy and good for US national security – and the best is yet to come.”
But some critics have questioned how much tariffs will really help strengthen the US industry, as the Trump government is also threatening to remove granted to chip factories by the Biden administration. And foreign governments such as China, Japan, South Korea and Taiwan strongly subsidize semiconductors with tools such as subsidies and tax exemptions.
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