US President Donald Trump announced plans on Tuesday to add major new taxes on imported cars, computer chips, and medicines, in a move that could shake up world trade.
He wants to set car import taxes “in the neighbourhood of 25%” starting April 2, after his team gives him options for various import duties. Trump has long complained about how other countries treat U.S. car exports. For example, the European Union charges 10% on imported cars, while the U.S. only charges 2.5% (though the U.S. does charge 25% on pickup trucks from most countries).
EU trade leader Maros Sefcovic will meet U.S. officials in Washington on Wednesday to discuss these threats. When asked if the EU could avoid these new taxes, Trump claimed they had already agreed to lower their car tariffs, though EU officials say this isn’t true.
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Trump also plans to put similar 25% taxes on imported medicines and computer chips, saying these taxes might go even higher over time. He said he’ll give drug and chip makers some time to build U.S. factories to avoid these taxes, and expects major companies to announce new U.S. investments soon.
This comes after several other trade moves in his first month as president: a 10% tax on Chinese goods, planned 25% taxes on Mexican and Canadian imports (currently delayed), and new steel and aluminium taxes starting March 12.
This isn’t the first time Trump has threatened car tariffs. In 2018-2019, his team studied whether car imports threatened national security, but he never acted on the findings. Some of that research might be used for these new planned tariffs.
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