On Monday the Trump administration took some measures that will most likely result in new tariffs on semiconductors and pharmaceuticals, adding to the tariffs President Trump has imposed on imports globally.
Federal notices issued earlier this week stated that the government had initiated investigations, related to national security, into imports of chips and pharmaceuticals, and the machinery used for their respective production. Trump suggested that such investigations could result in the imposition of duties.
Kush Desai, White House spokesman, said the president “has long been clear about the importance of reshoring manufacturing that is critical to our country’s national and economic security.” The new duties on semiconductors and pharmaceuticals would be issued under Section 232 of the Trade Expansion Act of 1962, which allows the president to impose tariffs to protect the safety of the country.
Trump’s main goal here, however, is to strengthen local manufacturing. To date, the U.S. relies heavily on chips imported from Taiwan and elsewhere in Asia, a trend that both Democrats and Republicans have described as a serious risk to the nation. As for drugs, on the other hand, the MAGA leader had already said in recent weeks that the U.S. having become used to importing a massive amount of them, no longer has the capacity to produce them at home. Several medications purchased by the U.S. come from China, Ireland, and India.
Some technology companies have responded positively to the president’s calls for more investment in the United States. Taiwan Semiconductor Manufacturing Company, the world’s largest chip maker, announced in March that it will spend $100 billion in the country over the next four, years to expand its manufacturing capacity.
On Monday, on the other hand, Nvidia, a leading chip company, announced that it will produce supercomputers for artificial intelligence entirely in the United States. Over the next four years, the company will produce up to $500 billion worth of AI infrastructure, in partnership with TSMC and other industry giants.
Apple itself has indicated that it is ready to invest about 500 billion to expand its plants across the nation.
While the government considers new tariffs on chips and pharmaceuticals, the president also hinted that some car companies could be exempted from the duties temporarily to allow them to relocate their production. “They need a little bit of time because they’ve got to make them here,” Trump said, ”I’m a very flexible person. I don’t change my mind, but I am flexible.”
After the president’s words, shares of some automakers, such as General Motors, Ford Motor, and Stellantis, returned to rise 4.8 percent, 5 percent, and 4.5 percent, respectively.
