After applying 100% tariff on medicines, Trump is now considering a new tariff scheme. A report by Reuters claimed that Trump is considering a new tariff scheme on electrical goods, which will be based on the number of chips in them. However, no official details have been released yet, which can change the plan.
If these tariffs are applied, they will affect from laptops to toothbrushes, electrical goods and can increase global inflation. The income of semiconductor companies will also be affected. Michael Strain, an economist at the American Enterprise Institute, said the scheme may increase the prices of goods, especially at a time when the US is struggling with inflation, which is currently above the target of the Federal Reserve and is increasing. The economist said that the increase in tariffs will also increase the prices of domestic goods, which will increase the input cost. This can increase inflation for common people.
New tariff signs
Reuters reported that White House spokesman Kush Desai said that the US cannot depend on foreign imports for its national and economic security semiconductor products. He further stated that the Trump administration is adopting a comprehensive, multidimensional approach to bring manufacturing companies back to the US, including tariffs, tax cuts, regulation relaxation and energy.
100% tariff promise on semiconductors
Which chip-based products will be subject to tariffs, accurate rates and possible discounts are not yet determined. Trump has already promised to impose 100% tariff on semiconductor imports, while companies have been exempted who manufacture or want to do so. The Taiwan semiconductor manufacturing company and Samsung Electronics are among the largest foreign suppliers.
It is also a matter of concern in relation to semiconductors.
Reuters reported that another source said that the Department of Commerce is considering imposing 25% tax on chip-related materials in imported equipment and 15% on imported electronics imported from Japan and European Union. However, these data are initial. Officials have also considered that if a company moves its production base to the US, investment in American plants can be levied per dollar tax. According to sources, the Department of Commerce initially proposed exemption to chip construction equipment to protect American semiconductor production from damage, but the White House withdrew the proposal citing opposition to President Trump’s concessions.
100% tariff on medicines
Significantly, the idea came amidst the widespread efforts of President Donald Trump to tough the American trade policy. On Thursday, he announced new import duty, including 100% tariffs on branded drugs and 25% duty on heavy trucks, which will be effective from October 1.