President Trump is considering easing tariffs on auto companies, giving them time to adjust supply chains. Simultaneously, he's initiating investigations into imposing tariffs on semiconductors and pharmaceuticals under Section 232 of the Trade Expansion Act of 1962.
Mr. Trump suggested potential relief for automakers sourcing parts from Canada and Mexico, stating they “need a little bit of time.” This follows prior exemptions for smartphones and tablets from China tariffs, which now face separate semiconductor tariffs.
The Department of Commerce is starting investigations into semiconductor and pharmaceutical tariffs, opening a three-week public comment period. Trump hopes pharmaceutical tariffs will encourage domestic production.
Trump’s past tariff actions have been erratic, including initial broad tariffs, followed by adjustments, exemptions, and increases, leading to uncertainty for trading partners and businesses.
The impact of his 25% tariffs on Canadian-made cars caused temporary plant shutdowns and layoffs. Auto parts currently remain exempt. The new tariffs could hurt Canadian drugmakers and American consumers.
Experts raise concerns about the legality of the expedited tariff process. The auto industry highlights the deep integration of the U.S. auto sector with other countries and that tariffs violate the USMCA.