New Tariff Plans: 3 Major Industries Affected

The United States is once again at the center of a trade dispute. President Donald Trump has proposed new tariff on semiconductors, cars and pharmaceuticals. After imposing tariffs on steel and aluminum, Trump now aims to introduce a 25% tariff on these industries. This move could have significant consequences for global trade, affecting countries in Asia, North America and Europe.

Semiconductors New Tariffs – A Blow to Asian Markets

With the rise of Artificial Intelligence, Semiconductors, also known as microchips, are essential for modern electronic devices. The United States imports twice as many semiconductors as it exports. According to the US Commerce Department, America imported $140 billion worth of electronic components last year, with $37 billion coming from Taiwan alone.

Taiwan could be one of the hardest-hit nations. TSMC has already announced plans to build three new factories in the United States, possibly to reduce reliance on Taiwanese production. Taiwanese President Lai Ching-te has stated that Taiwan will continue to invest in the US to maintain strong trade relations.

South Korea is also a major supplier of semiconductors. Samsung doubled its exports to the US last year, reaching over $8 billion. If a tariff is imposed, it could lead to major disruptions in the global supply chain. Industry experts warn that such a move would not only hurt Asian manufacturers but also increase costs for American tech companies.

Car New Tariffs – Everyone Loses

The auto industry is another sector that could face serious consequences. The US imported $269 billion worth of vehicles last year, with Mexico being the largest supplier, providing $95 billion worth of cars. Other major exporters include Japan, South Korea, Canada and Germany.

If Trump enforces a 25% tariff on imported cars, American consumers will likely see a sharp rise in vehicle prices. Many international car brands, including Toyota, Volkswagen, BMW and Mercedes, already manufacture vehicles in the United States, but they still rely on parts from overseas. Some auto components cross the US-Canada border multiple times before being assembled into a finished car. This means that tariffs on imported cars would indirectly hurt US carmakers as well.

Even American auto companies that have factories in Mexico and Canada would suffer. Lower labor costs in Mexico have attracted many manufacturers, and any tariff increases would make production more expensive. According to experts, it would be nearly impossible for automakers to absorb these costs without raising car prices.

Pharmaceuticals New Tariffs with Limited Impact

Unlike semiconductors and cars, the pharmaceutical industry may not experience severe disruptions. The US imports a significant portion of its medicine from other countries. Ireland is the leading exporter, accounting for 30% of US pharmaceutical imports in 2024. Other major suppliers include Italy, China and Germany.

Despite the proposed tariffs, experts believe that the pharmaceutical industry has strong profit margins and diversified production facilities, including plants in the United States. This would allow companies to absorb some of the tariff costs. However, consumers could still see price hikes, especially on generic drugs that have thinner profit margins.

One area of concern is the growing demand for weight-loss medications such as Ozempic and Wegovy, produced by Danish company Novo Nordisk. If tariffs increase, American patients might end up paying more for these high-demand treatments.

What Comes Next?

Trump’s proposed tariffs have sparked concerns among economists and industry leaders. Many argue that such a tariff could harm the US economy by increasing production costs and leading to higher consumer prices. Additionally, affected countries might retaliate with their own tariffs on American goods, further escalating trade tensions.

As the situation develops, businesses and consumers alike will be watching closely to see how these new tariff policies unfold. Whether they strengthen or weaken the US economy remains to be seen, but one thing is certain: global trade dynamics are shifting once again.