US president says he is looking at offering relief to automakers as they adjust their supply chains.
United States President Donald Trump has advanced plans to introduce tariffs on semiconductors and pharmaceutical products, even as he floated the possibility of a reprieve from his duties on the auto industry.
In the latest flurry of trade announcements on Monday, the Trump administration launched investigations into the national security implications of importing the goods and related products, including chip-making equipment and pharmaceutical ingredients.
The probes follow Trump’s remarks over the weekend that he would announce the details of new tariffs on semiconductors within days, after his administration exempted the chips and other high-tech goods from his “reciprocal” tariffs unveiled on April 2.
The investigations are the latest trade-related probes initiated by the US under Section 232 of the Trade Expansion Act, which the Trump administration has also used to scrutinise imports of copper, lumber, steel and aluminium.
Semiconductors are crucial to the manufacturing of almost all modern electronics.
The US is heavily dependent on semiconductor imports from Asia, especially Taiwan, though Trump, like his predecessor Joe Biden, has been pushing companies to make more of the chips domestically.
In an announcement that was hailed by the White House as an example of Trump’s trade policies in action, chip giant Nvidia on Monday said that it would spend up to $500bn building its artificial intelligence super computers on US soil for the first time.
Trump’s move towards new tariffs on chips and pharmaceuticals raises the prospect of fresh turmoil for businesses and financial markets around the globe, which have been roiled by the US president’s dizzying back-and-forth announcements on trade.
After announcing a 90-day pause on most of his “reciprocal” tariffs against dozens of trade partners last week, Trump raised the rate of duties on imports from China to 145 percent.
China has, in turn, slapped US imports with a tariff of 125 percent, while pledging to “fight to the end” if Washington continues to escalate its trade war.
Financial markets and businesses have been waiting for signs that Trump’s tariffs will be watered down or dropped outright if the administration can extract concessions from its trading partners.
In an interview with Fox Business on Monday, Kevin Hassett, Trump’s top economic adviser, said that officials were making “astonishing” progress in their negotiations with US trading partners and had received “amazing offers” from more than 10 countries.
Hassett did not specify which countries the US was making progress with.
On Monday, Trump suggested that he could offer automakers some relief from his 25 percent tariffs on vehicles and auto parts to give them time to adjust their supply chains.
“I’m looking at something to help some of the car companies, where they’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they’re going to make them here,” Trump told reporters at the White House.
“I’m a very flexible person. I don’t change my mind, but I’m flexible, and you have to be,” Trump added.
US stocks, which have been on a rollercoaster ride amid Trump’s tariff announcements, rose higher on Monday, with the benchmark S&P500 and tech-heavy Nasdaq Composite gaining 0.79 percent and 0.64 percent, respectively.
Asian markets rose on Tuesday morning, with Japan’s Nikkei 225 and South Korea’s KOSPI up 1.16 percent and 0.67 percent, respectively, as of 02:00 GMT.