Trump Firm on Slapping 25% Tariffs on Cars, Drugs, and Chips

President Donald Trump announced he would likely impose 25% tariffs on automobiles, semiconductor chips, and pharmaceutical imports, with an official announcement expected on April 2, Hadriana Lowenkron and Josh Wingrove reported for Bloomberg News.

"It’ll be 25% and higher, and it’ll go very substantially higher over the course of a year," Trump replied when questioned about similar levies on pharmaceuticals and semiconductor chips.

The move, if implemented, would dramatically expand Trump's trade war. The president had previously announced 25% tariffs on steel and aluminum, which are set to take effect in March.

The remarks were Trump’s most detailed yet regarding new trade barriers in additional sectors.

"I probably will tell you that on April 2, but it’ll be in the neighborhood of 25%," Trump said at his Mar-a-Lago club when asked about auto tariffs.

When questioned about similar levies on pharmaceuticals and semiconductor chips, Trump replied: "It’ll be 25% and higher, and it’ll go very substantially higher over the course of a year," as reported by Stephanie Lai, Jenny Leonard, Philip J. Heijmans, and Edwin Chan for Bloomberg News.

"It seems like no one is really getting through this unscathed," said Katrina Ell, head of Asia-Pacific economies at Moody’s Analytics.

"I hope they’re using them as a negotiating tool. What we know from the past is that these tariffs don’t work as Trump wants them to work."

A 25% tariff on automobiles would have far-reaching consequences for the industry. In 2024, the U.S. imported about 8 million passenger cars and light trucks, which accounted for nearly half of all U.S. vehicle sales.

European and Asian automakers, including Volkswagen AG and Hyundai Motor Co., would be among the hardest hit.

"European automakers may face challenges in maintaining market share, as most would struggle to pass such tariffs onto consumers or absorb the cost themselves given already thin margins," said Rella Suskin, an equity analyst at Morningstar, as reported by Ryan Beene, Katia Dmitrieva, Malcolm Scott, and Brendan Murray for Bloomberg.