President Donald Trump told reporters on Tuesday that he expects to implement additional tariffs in April on auto, semiconductor, and pharmaceutical imports.
"I probably will tell you that on April 2nd, but it'll be in the neighborhood of 25%," President Trump said about auto imports.
He added that the semiconductor and pharmaceutical imports will also be subject to a 25% tariff.
"And it'll go very substantially higher over the course of a year," he added.
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The tariffs would expand on a 10% tariff on nearly all goods coming from China. The U.S. has also imposed a 25% tariff on steel and aluminum imports from China.
"One of the things that the president has learned is that tariffs are incredibly effective negotiating tools," said Raymond Robertson, an economics professor at Texas A&M University. "Countries know that it greatly reduces their economic growth to have tariffs imposed on them. And that's why they impose tariffs on us in retaliation."
According to the Food and Drug Administration, the U.S. imports about $100 billion a year in human and pet drugs. According to the U.S. Bureau of Economic Analysis, about $1.8 trillion in automotive vehicles, engines and parts were imported into the U.S. in 2024.
The Observatory of Economic Complexity said the U.S. imported $25.4 billion in semiconductors in 2023, but there has been a significant increase in those imports in recent years.
Tariffs are fees charged for companies to import their goods from another country. Many economists believe that most companies will pass the cost of a tariff to the consumer instead of absorbing the fee.
In fact, Acer CEO Jason Chen said in an interview with the Telegraph that new laptops will now cost an extra 10% due to U.S. tariffs.
According to research released in October 2024 by Georgia State University, Arizona State University, and Colorado State University, tariffs might not only cause an increase in prices for consumers, but they can also disrupt supply chains.
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"While tariffs can provide some protection to certain industries, they can also create inefficiencies for the industries they were designed to protect, as well as for their supply chain partners," the study said. The disruption to the supply chain could cause additional challenges to the economy.
"These findings demonstrate the ripple effect of unintended consequences that tariffs can lead to throughout supply chains, motivating further theoretical development and informing trade policy," the study said. The Trump administration has contended that the tariffs can raise revenue for the U.S. and force manufacturers to produce more products in the U.S.
However, General Motors told Scripps News on Wednesday that if tariffs become permanent, it would raise questions about the locations of their manufacturing plants. GM's plants are currently located in the U.S., Mexico and China.
