In the face of increasing uncertainty in global trade wars, U.S. President Donald Trump has hinted at the possibility of granting tariff relief to automobile companies while initiating procedures to impose additional tariffs on semiconductor and pharmaceutical product imports.

Trump Considers Suspending Auto Tariffs!

Claims to Be "Very Flexible"!

President Donald Trump said on Monday that he might temporarily exempt previously imposed auto tariffs to give automakers time to adjust their supply chains.

Source: X

Trump told reporters in the Oval Office: "I am considering measures to help car companies address these issues." The Republican president said that automakers need time to move production back from Canada, Mexico, and other countries. "They will produce in the U.S., but it will take some time, so I am discussing such matters," he added.

This statement suggests that Trump may once again adjust his tariff policies. Previously, large-scale taxation had caused panic in financial markets, and Wall Street economists also warned of a recession.

Source: Global News

On March 27, Trump announced a 25% tariff on autos and called the measure "permanent." However, as economic and political pressures have increased, Trump's tough stance on trade issues has become increasingly unclear.

Trump said on Monday: "I won't change my mind, but I'm flexible."

This "flexibility" has also deepened the confusion and uncertainty about his true intentions and ultimate goals.

Carl Tannenbaum, chief economist at Northern Trust, joked that this unpredictable policy might require him to wear a neck brace. In an analysis, he warned: "The damage to consumer confidence, business, and market confidence may already be irreversible."

Trump also mentioned that he recently spoke with Apple CEO Tim Cook and "provided assistance." Many of Apple's products, including iPhones, are still assembled in China.

The White House: Initiation of Semiconductor and Pharmaceutical Tax Procedures

On Monday, White House spokesperson Kush Desai said that in accordance with President Trump's instructions, the U.S. Department of Commerce is conducting a national security investigation into the semiconductor and pharmaceutical industries under Section 232 of the Trade Expansion Act of 1962.

This procedure allows the U.S. government to impose tariffs for reasons of national security. Previously, Trump used this provision to impose a 25% tariff on all auto, steel, and aluminum imports.

Source: Global News

Desai wrote in an email: "President Trump has consistently emphasized the need to 'repatriate' manufacturing that is critical to the nation and economy."

The Federal Register announcement shows that this investigation will enter a three-week public comment period starting Wednesday.

Trump himself stated in his speech that he hopes to force pharmaceutical companies to relocate production from abroad to the U.S. by imposing tariffs on drugs. He said: "We are going to target the pharmaceutical industry; the higher the tariffs, the faster they will return."

Canadian Automobile and Pharmaceutical Enterprises May Suffer Heavy Damage

Earlier this year, Trump repeatedly wavered on whether to tax Canada and Mexico, eventually deciding to impose a 10% tariff on Canadian and Mexican oil, natural gas, and potash, and a 25% tariff on other goods, while exempting goods within the framework of the United States-Mexico-Canada Agreement (USMCA).

However, Canadian and Mexican produced automobiles, steel, and aluminum still face an additional 25% tariff, even if they meet USMCA conditions.

David Adams, chairman of the Canadian Vehicle Manufacturers' Association, said it is difficult to judge his true intentions from Trump's brief remarks. However, he pointed out that a 25% auto tariff clearly violates USMCA, so the cancellation of the tariff would be logical.

Flavio Volpe, president of the Canadian Automotive Parts Manufacturers' Association, said that Trump seems to recognize the high dependence of North American automobile manufacturing on international supply chains. "This acknowledges the key role of Canada, Mexico, and even China in the U.S. automotive industry," he said. "As to whether he will act positively based on this recognition, it remains to be seen."

Source: Global News

Since Trump imposed a 25% tariff on Canadian-made vehicles, two factories in Ontario have temporarily shut down: Stellantis' plant in Windsor and General Motors' plant in Ingersoll, resulting in thousands of layoffs.

So far, automotive parts have not been included in the tariff list, avoiding further disruption to the U.S. factory supply chain.

Linda Hasenfratz, executive chairman of Linamar, an automotive parts manufacturer in Guelph, Ontario, said that moving factories to the U.S. to avoid taxes could cost billions of dollars. She noted that companies generally view tariffs as temporary measures and do not base long-term manufacturing strategies on them.

Regarding pharmaceutical tariffs, Canadian pharmaceutical companies will be hit hardest, especially those exporting low-cost generic drugs to the U.S. The U.S. already has some of the highest drug prices in the world, and this tariff will also increase medical costs for American patients.

Inu Manak, a trade expert at the Council on Foreign Relations (CFR), pointed out that Trump's plan to impose tariffs on semiconductors and pharmaceuticals using Section 232 may face legal challenges.

She said that Trump and his advisor Lutnick seem to suggest that the planned tariff increases will bypass the full investigation process and take effect quickly. "But this is a process that should undergo thorough investigation, and their current approach is clearly not that way," she added.

Original source: https://www.toutiao.com/article/7493633413451121192/

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