President Trump has been talking about tariffs for a while, but the specifics around timing and scope have remained unclear. Trump has made various statements, including 25% tariffs on all imports from Mexico and Canada, 10% to 60% tariffs on China, and 10% or 20% tariffs on everything else. He’s also threatened to scrap a deal with Colombia and then reinstated it.
During a speech to House Republicans, Trump laid out his plan to tax specific imports, including pharmaceuticals, chips, semiconductors, and steel. He emphasized that the way to avoid paying tariffs is to build in the US. Trump’s plan is to start with high-profile items and build upon them over time, similar to how he approached Colombia.
However, Treasury Secretary Steven Mnuchin initially proposed starting with a lower tariff rate of 2.5% and increasing it, but Trump rejected this plan, saying he wants it to be “much, much bigger”. Trump’s plan could affect the US, as the top imported goods are pharmaceuticals and medical supplies from Mexico and China, as well as semiconductors from Taiwan and steel from Canada.
Tariffs could increase prices for American consumers, as importers will likely pass the cost on to customers. Trump’s plan could also contradict his promise to lower prescription drug prices. The impact of tariffs on the economy and consumers is still uncertain, as the plan remains unclear. The use of tariffs as a negotiating tactic is also a concern, as Trump has previously made such threats only to retract them.