US tariffs and Trump’s latest trade policy moves

As the US government continues implementing a new protectionist trade policy, we review the latest developments including the potential imposition of a 25% tariff on all imports of cars, pharmaceuticals, and semiconductors.

Donald Trump announced his latest tariffs on 18 February, stating that further details will be released on 2 April. The announcement follows an investigation into international tariff practices, with reciprocal tariffs anticipated against nations imposing higher duties on US goods.

The proposed 25% tariff will substantially increase costs for UK and EU car manufacturers exporting to the US. European carmakers currently face a 10% EU tariff on American vehicles, compared to the 2.5% duty applied by the US on passenger cars. German luxury car manufacturers, particularly reliant on US sales, are likely to be among the hardest hit. In response to these measures, manufacturers may have to shift production to the US, although the complexity of supply chains presents significant challenges in making this transition.

The pharmaceutical industry is also highly exposed to these new tariffs. Ireland, as the largest exporter of pharmaceuticals to the US, faces considerable risk, with exports nearing €100bn in 2024. Indian pharmaceutical firms have already experienced negative market impacts, with stock values declining in reaction to the tariff announcement. European pharmaceutical firms may also see increased costs, which could affect healthcare pricing and investment in research and innovation.

The EU is expected to retaliate against these tariffs, with European Commission officials warning of countermeasures against the US. The steel and aluminium sectors are also impacted, with concerns raised over increased costs for niche UK steel products that are essential to US defence operations. Additionally, online retailers could be affected by changes to import duty rules, particularly for UK businesses selling lower-value products in the US.

Looking ahead
Trump has indicated that further tariff increases may follow over the coming year. As a result, UK and EU businesses face heightened trade uncertainty, requiring adjustments to supply chains and pricing strategies. The long-term effect of these policies could reshape global trade relationships, with industries preparing for potential disruptions and increased costs. If you want to be updated on Trump’s latest trade policy moves, be sure to keep an eye on our news section!

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Plan ahead and strengthen your supply chain. Contact Logicall today to explore how our solutions can support your global trade strategy.