After imposing 100% tariffs on pharmaceuticals, Trump is now considering a new tariff plan. A Reuters report claims that Trump is considering a new tariff plan on electrical goods, based on the number of chips embedded in them. However, no official details have been released yet, which could lead to changes in this plan.
If these tariffs are imposed, they will impact electrical goods—from laptops to toothbrushes—and could lead to a rise in global inflation. Semiconductor companies’ income would also be affected. Economist Michael Strain of the American Enterprise Institute said that this plan could increase commodity prices, especially at a time when the US is grappling with inflation, which is currently above the Federal Reserve’s target and rising.
Economists said that increasing tariffs would also increase the prices of domestically produced goods, as input costs would rise. This could lead to higher inflation for ordinary people.
New Tariffs Indicated
Reuters reported that White House spokesman Kush Desai stated that the US cannot rely on foreign imports for semiconductor products essential to its national and economic security. He further stated that the Trump administration is pursuing a comprehensive, multi-pronged approach to attract manufacturing companies back to the US, including tariffs, tax cuts, deregulation, and energy.
Promised 100% Tariffs on Semiconductors
Which chip-based products will be subject to tariffs, the exact rates, and potential exemptions are yet to be determined. Trump has already promised a 100% tariff on semiconductor imports, while exempting companies that manufacture in the US or wish to do so. Taiwan Semiconductor Manufacturing Company and Samsung Electronics are among the largest foreign suppliers.
This is also a concern regarding semiconductors
Reuters reported that another source said the Commerce Department is considering imposing a 25% tax on chip-related materials in imported equipment and a 15% tax on electronics imported from Japan and the European Union. However, these figures are preliminary. Officials have also considered providing a per-dollar tax on investments in American plants if a company shifts its base production to the US.
According to sources, the Commerce Department initially proposed exempting chip manufacturing equipment to prevent harm to US semiconductor production, but the White House withdrew the proposal, citing President Trump’s resistance to concessions.
100% Tariffs on Pharma
This proposal comes amid President Donald Trump’s broader efforts to tighten US trade policy. On Thursday, he announced new import tariffs, including a 100% tariff on branded drugs and a 25% duty on heavy trucks, effective October 1st.
