President Donald Trump announced plans on Tuesday to implement approximately 25% tariffs on imports of automobiles, semiconductors, and pharmaceuticals. Speaking from his Mar-a-Lago estate in Florida, Trump indicated he would likely reveal specific details of the tariffs on April 2, following cabinet reports on potential import duty options due April 1.
The proposed automotive tariffs come amid Trump’s claims of “unfair” treatment of U.S. automotive exports in foreign markets. While the U.S. currently maintains a 25% tariff on pickup trucks from non-USMCA countries, Mexico and Canada – which are exempt under the United States-Mexico-Canada Agreement – account for roughly half of U.S. automobile and auto parts imports.
Regarding semiconductors and pharmaceuticals, Trump suggested rates could start at 25% “or even higher” with substantial increases throughout the year. The implementation timeline for these sectors remains unspecified, with Trump indicating the delay is intended to give companies time to establish U.S.-based operations. He anticipates major companies will announce new U.S. investments in the coming weeks.
This announcement follows Trump’s recent moves to impose tariffs on all steel and aluminum imports starting March 1, along with reciprocal tariffs on countries that levy duties on U.S. products. EU trade chief Maros Sefcovic is scheduled to meet with U.S. officials including Commerce Secretary Howard Lutnick, Trade Representative nominee Jamieson Greer, and National Economic Council Director Kevin Hassett to discuss the potential tariffs.
The impact on Mexico could be significant, as the United States serves as Mexico’s largest export market for automobiles and pharmaceuticals, while receiving 64% of Mexico’s semiconductor exports as of 2023. Mexican Economy Minister Marcelo Ebrard will meet with American counterparts in Washington on Thursday to discuss the planned tariffs, emphasizing the importance of determining a path forward given the deep integration between the two economies.
The talks come at a crucial time, as Mexico has become the United States’ largest trading partner since the 2018 USMCA agreement, currently holding a 15.5% share of the U.S. import market. The semiconductor sector holds particular significance, as Mexico was courted by the U.S. in 2023 as a key partner in developing a North American semiconductor supply chain under the 2022 CHIPS Act’s International Technology Security and Innovation Fund.