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President Donald Trump on Tuesday said he would unilaterally impose 25 percent import taxes on American purchases of automobiles, pharmaceuticals and microchips as early as April 1 despite fears that doing so would supercharge inflation rates he promised to tame during his campaign for the presidency last year.
Speaking during an impromptu press conference at his Mar-a-Lago club in Palm Beach, Florida, Trump was asked about the rates of tariffs he plans to impose in pursuit of what he has called “reciprocity” in trade and in an effort to force manufacturers to bring their facilities back to the U.S.
He replied: “I probably will tell you that in on April 2, but it’ll be in the neighborhood of 25 percent. Pharmaceuticals, it’ll be 25% and higher, and it’ll go very substantially higher over course of a year,” he said.
Trump added that he wants to give manufacturers “time to come in” and “a little bit of a chance” to re-shore manufacturing facilities, but he declined to address whether the tariffs he has proposed would hurt or harm efforts by his administration to bring prices down after record inflation turned American voters against the prior Democratic administration of former president Joe Biden.
The president also complained that European Union consumers don’t buy American cars and blamed that fact on “unfair” tariffs imposed by the 27-member international bloc.
“We have a deficit of $350 billion they don’t take our cars, they don’t take our farm products, they don’t take almost anything. They take very little, and we’re going to have to straighten that out, and we will,” he said.
The president’s announcement came less than a week after he threatened to kick off a new global trade war by announcing that the U.S. will soon levy significant import taxes on any country that imposes its own taxes on American goods. He also declared that America would treat the Value-Added Tax system used throughout much of Europe as the same as a tariff even though the VAT has nothing to do with tariffs.
He has frequently groused about trade deficits that America has with other countries — even close allies such as Canada and Mexico — and he often claims that trade deficits are evidence that the U.S. is being taken advantage of or “ripped off.”
Trump and his allies have suggested that higher tariffs in foreign imports would create a level playing field between the U.S. manufacturing and foreign competition, but in reality the tariffs would be a tax increase on Americans paid in the form of higher prices.
Asked whether the tariffs he is calling for would lead to more inflation during an Oval Office signing ceremony last Thursday, he denied they would have that effect and told reporters: “Prices could go up short term, but prices will also go down.”
“Long-term it’s going to make our country a fortune,” he said. “I’ll tell you, what will go up is jobs. The jobs will go up tremendously. We’re going to have great jobs, jobs for everybody. This is something that should have been done many years ago.”
