Uncertainty lingers
Market participants remain wary of President Donald Trump’s trade policies, with latest updates indicating more tariffs – and rollbacks – may be on the way. Pharmaceutical and semiconductor imports are under scrutiny for potential tariffs, while the automobile sector may be offered some respite in the days ahead.
Review underway: On April 1, the Trump administration began investigating the impact of pharmaceutical and semiconductor imports on national security, likely setting the stage for tariffs on the sectors. The Department of Commerce’s pharma investigation covers generic and non-generic drugs, active pharma ingredients, and derivative products. The semiconductor probe covers items including leading-edge chips, chipmaking equipment, silicon wafers, and “downstream products that contain semiconductors.”
The probes will look into current and projected demand for the pharma and semiconductor products, the ability of domestic production to meet demand, and potential for export restrictions. The chip probe will also assess “the ability of foreign nations to weaponize their control over semiconductors and SME supply chains.” The investigations were initiated under Section 232 of the Trade Expansion Act of 1962, which allows the president to adjust imports that are found to threaten national security.
Tariff relief? In other news, Trump floated a potential reprieve for the 25% tariffs on automobile and auto part imports, given the industry’s deeply-integrated North American supply chains. “I’m looking at something to help some car companies with it,” Trump told reporters. “They’re switching to parts that were made in Canada, Mexico and other places… they need a little bit of time, because they’re going to make them here.” Trump’s signal was enough to lift top automakers’ shares – GM, F, STLA – which ended on a higher note on Monday.
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