US president is considering providing assistance to automakers as they adapt their supply chains.
In recent trade announcements, the Trump administration initiated investigations into the national security implications of importing goods including semiconductor equipment and pharmaceutical ingredients.
These investigations are the latest in a series of trade-related probes initiated by the US under Section 232 of the Trade Expansion Act, which has also been used to examine imports of copper, lumber, steel, and aluminum.
Semiconductors are essential components for manufacturing modern electronics.
The US heavily relies on semiconductor imports from Asia, particularly Taiwan, although both Trump and former President Joe Biden have been encouraging companies to increase domestic chip production.
Chip manufacturer Nvidia announced it would invest up to $500 billion to build artificial intelligence supercomputers in the US, a move praised by the White House as an example of Trump’s trade policy in action.
Trump’s potential new tariffs on chips and pharmaceuticals may cause further disruption for businesses and financial markets worldwide, which have already been impacted by his fluctuating trade announcements.
After initially pausing most of his “reciprocal” tariffs against numerous trade partners last week, Trump increased the rate of duties on imports from China to 145 percent.
China has retaliated by imposing a 125 percent tariff on US imports, reinforcing its pledge to “fight to the end” in the escalating trade conflict.
Financial markets and businesses are awaiting Trump’s tariffs to be relaxed or abandoned if the administration can secure concessions from its trading partners.
In a Fox Business interview on Monday, Trump’s top economic adviser, Kevin Hassett, stated that negotiations with US trading partners are progressing well, with “amazing offers” received from over 10 countries.
Hassett did not disclose the specific countries with which progress has been made.
Trump suggested on Monday that he may provide automakers with some relief from his 25 percent tariffs on vehicles and auto parts to help them adjust their supply chains.
“I’m looking at something to help some of the car companies, as they’re switching to parts made in Canada, Mexico, and other places, and they need a bit of time because they’ll be making them here,” Trump told reporters at the White House.
“I’m a very flexible person. I don’t change my mind, but I’m flexible, and you have to be,” Trump added.
US stocks, which have been volatile due to Trump’s tariff announcements, showed gains on Monday, with the S&P 500 and Nasdaq Composite increasing by 0.79 percent and 0.64 percent, respectively.
Asian markets also rose on Tuesday morning, with Japan’s Nikkei 225 up 1.16 percent and South Korea’s KOSPI up 0.67 percent as of 02:00 GMT.
