U.S. President Donald Trump said on Feb. 18 (local time) that he intends to impose tariffs on automobile, semiconductor and pharmaceutical imports of around 25%, with an announcement coming as soon as April 2.
Speaking at a press conference held at his Mar-a-Lago residence in Florida, Trump disclosed that the tariff rate on imported automobiles would likely be around 25%. “I probably will tell you that on April 2, but it’ll be in the neighborhood of 25%,” Trump told reporters when asked about auto tariffs. About drug imports, he said, “It’ll be 25% and higher, and it’ll go very substantially higher over a course of a year.”
The proposed tariffs are part of President Trump’s broader strategy to address trade imbalances and encourage domestic manufacturing, aligning with his administration’s protectionist trade policies.
Trump expressed dissatisfaction with the European Union’s trade practices, particularly their limited importation of American cars and agricultural products. He said the EU hardly imports American cars or agricultural products. The EU collects a 10% duty on vehicle imports, four times the U.S. passenger car tariff rate of 2.5%.
In a bid to incentivize domestic production, Trump noted, “We want to give them (the companies) time to come in. “When they come into the United States and they have their plant or factory here there is no tariff, so we want to give them a little bit of a chance,” the president said. This statement underscores the administration’s focus on bolstering domestic manufacturing by encouraging foreign companies to establish production facilities within the U.S.
The potential imposition of auto tariffs has significant implications for South Korea, a major exporter of vehicles to the United States. Last year, South Korea exported 1.43 million vehicles to the U.S., accounting for 51.5% of its total automobile exports. Automobiles were the top export item to the U.S., amounting to $34.7 billion, which constituted 27.2% of South Korea’s total exports. In contrast, South Korea’s imports of American automobiles were considerably lower, totaling only $2.1 billion.
The modern automotive industry relies heavily on international supply networks, and tariffs could disrupt these chains, affecting not only the countries directly involved but also other nations participating in the production process. Additionally, the concept of reciprocal tariffs, where countries impose tariffs in response to those imposed by trading partners, raises the potential for escalating trade tensions and their global economic implications.
