Details on newly announced prices have not been made public but now include semiconductor chips and pharmaceuticals
February 19, 2025 at 1:16 PM
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- An automatic price offered at 25% could reshape world trade, which has an impact on supply chains and costs.
- Politics intends to encourage the production of these goods within American borders.
- More details on the prices will be announced on April 2, describing affected products and nations.
In another decision than some CEOs, such as Jim Farley from Ford, could describe as chaotic, President Donald Trump proposed to set a 25% rate on goods, including imported cars, which was to take effect on April 2 . Although he did not specify who clarified who the countries would be affected, it would extend the potential scope to include semiconductor chips and pharmaceuticals, which, by leaving, could face prices even more high that cars.
Trump says other details will be announced on April 2, which suggests that the gap by then is an opportunity for companies to move production to American soil. “When they enter the United States and have its plant or factory here, there is no price. So we want to give them a little luck, “he said.
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In recent weeks, the American president has repeatedly threatened other nations with new prices. He has already imposed a 10% rate on Chinese manufacturing goods. China retaliated with a 10% price on American manufacturing cars. He also threatened Canada and China with prices of 50 to 100% on cars. Maybe in this light, 25% do not seem so bad.
His momentum, he says, is due to the unfair nature of the agreements between the United States and its business partners. For example, the EU collects a 10% rate on all vehicle imports. The United States collected only 2.5% on passenger cars. The famous “chicken tax” goes in the other direction and puts a 25% price on all nations vans outside the United States. Trump recently threatened the EU with a similar price of 10% to correspond to his.
To be clear, the Trump administration has not clarified which country or country will face this new price of 25%. It is plausible that he can impose it on the EU, Canada and Mexico or be more selective than that. This is not that the story ends because Trump also mentioned new flea tariffs.
Only a few years ago, an international shortage caused all kinds of chaos in the automotive industry. Cars were sitting for weeks or more in an almost deliverable state while waiting for a few tiny components, including tokens. If the prices of semiconductors again disrupt the supply chains, car manufacturers could find themselves in a familiar situation, and this time, with a self-inflicted touch.
