US President Donald Trump said that US tariffs on semiconductor and pharmaceutical imports would be announced “within the next week or so,” as the administration prepares to target key economic sectors in its effort to remake global trade.
“We’ll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it’s going to go to 150 percent and then it’s going to go to 250 percent because we want pharmaceuticals made in our country,” Trump said yesterday in an interview on CNBC.
“We’re going to be announcing on semiconductors and chips, which is a separate category,” the US president continued.
Photo: Carlos Barria, Reuters
The US Department of Commerce has been investigating the semiconductor market since April to set the stage for possible tariffs on an industry that’s expected to generate nearly US$700 billion in global sales. Under Trump, the US has already imposed levies on imports of cars and auto parts as well as steel and aluminum.
Levies on imported chips threaten to sharply increase costs for large data center operators including Microsoft Corp, OpenAI, Meta Platforms Inc and Amazon.com Inc that plan to spend billions of dollars on purchases of advanced semiconductors needed to propel their artificial intelligence businesses.
Trump has also threatened debilitating tariffs on the drug industry in an effort to force manufacturing back to the US. The US president recently demanded major suppliers of medicines drastically cut costs or face additional, unspecified penalties.
The world’s largest drugmakers, including Merck & Co and Eli Lilly & Co, operate scores of manufacturing sites across the globe. Nearly 90 percent of US biotech companies rely on imported components for at least half of their approved products, according to the Biotechnology Innovation Organization.
The sectoral tariffs on pharmaceuticals, metals and other industries stem from trade investigations that can last about nine months and are imposed on national security grounds under Section 232 of the Trade Expansion Act of 1962. It’s seen as stronger legal footing than the emergency powers Trump used for his country-specific levies, which face court challenges. Those so-called "reciprocal" tariffs are slated to go into effect tomorrow.
Trump is seeking fairness in bilateral commerce, with the aim of encouraging foreign investment in the US, bolstering domestic production and shoring up national industrial security. He also see duties as a means to raise revenue for the government.
Meanwhile, the US trade deficit narrowed in June to the tightest since September 2023 as companies scaled back on imports after a massive surge earlier in the year.
The goods and services trade gap shrank 16 percent from the prior month to US$60.2 billion, commerce department data showed yesterday.
The value of imports fell 3.7 percent, dragged down by the lowest value of imported goods since March last year. Exports contracted by a lesser amount. The figures aren’t adjusted for inflation.
Imports of consumer goods fell to the lowest level since September 2020, and industrial supplies and motor vehicles were also down. Meantime, inbound shipments of capital equipment rose.
The June report showed the merchandise-trade shortfall with China narrowed to the lowest in data back to 2009 as imports declined, while the deficit with Mexico narrowed after reaching a record level in May. The goods trade deficit with Canada narrowed to the tightest since the end of 2020.
WEAKER ACTIVITY: The sharpest deterioration was seen in the electronics and optical components sector, with the production index falling 13.2 points to 44.5 Taiwan’s manufacturing sector last month contracted for a second consecutive month, with the purchasing managers’ index (PMI) slipping to 48, reflecting ongoing caution over trade uncertainties, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. The decline reflects growing caution among companies amid uncertainty surrounding US tariffs, semiconductor duties and automotive import levies, and it is also likely linked to fading front-loading activity, CIER president Lien Hsien-ming (連賢明) said. “Some clients have started shifting orders to Southeast Asian countries where tariff regimes are already clear,” Lien told a news conference. Firms across the supply chain are also lowering stock levels to mitigate
IN THE AIR: While most companies said they were committed to North American operations, some added that production and costs would depend on the outcome of a US trade probe Leading local contract electronics makers Wistron Corp (緯創), Quanta Computer Inc (廣達), Inventec Corp (英業達) and Compal Electronics Inc (仁寶) are to maintain their North American expansion plans, despite Washington’s 20 percent tariff on Taiwanese goods. Wistron said it has long maintained a presence in the US, while distributing production across Taiwan, North America, Southeast Asia and Europe. The company is in talks with customers to align capacity with their site preferences, a company official told the Taipei Times by telephone on Friday. The company is still in talks with clients over who would bear the tariff costs, with the outcome pending further
Six Taiwanese companies, including contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), made the 2025 Fortune Global 500 list of the world’s largest firms by revenue. In a report published by New York-based Fortune magazine on Tuesday, Hon Hai Precision Industry Co (鴻海精密), also known as Foxconn Technology Group (富士康科技集團), ranked highest among Taiwanese firms, placing 28th with revenue of US$213.69 billion. Up 60 spots from last year, TSMC rose to No. 126 with US$90.16 billion in revenue, followed by Quanta Computer Inc (廣達) at 348th, Pegatron Corp (和碩) at 461st, CPC Corp, Taiwan (台灣中油) at 494th and Wistron Corp (緯創) at
NEGOTIATIONS: Semiconductors play an outsized role in Taiwan’s industrial and economic development and are a major driver of the Taiwan-US trade imbalance With US President Donald Trump threatening to impose tariffs on semiconductors, Taiwan is expected to face a significant challenge, as information and communications technology (ICT) products account for more than 70 percent of its exports to the US, Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) president Lien Hsien-ming (連賢明) said on Friday. Compared with other countries, semiconductors play a disproportionately large role in Taiwan’s industrial and economic development, Lien said. As the sixth-largest contributor to the US trade deficit, Taiwan recorded a US$73.9 billion trade surplus with the US last year — up from US$47.8 billion in 2023 — driven by strong
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