Trump's CNBC Interview
"We Want Semiconductors and Chips Manufactured in the U.S."
On August 5 (local time), U.S. President Donald Trump announced that he would unveil new item-specific tariffs on semiconductors next week. He also stated that tariffs on pharmaceuticals would start at a low rate and be gradually increased to 150%, and eventually up to 250%.
In an interview with CNBC's "Squawk Box" on the same day, President Trump said, "We are planning to announce a separate (tariff) category for semiconductors and chips."
He explained, "We want these products to be manufactured in the United States," and added that the announcement would be made "next week or so."
He also reaffirmed his policy to impose tariffs on pharmaceuticals.
President Trump stated that tariffs on pharmaceuticals would start with a "small tariff" and be raised to as much as 150% within one to one and a half years, and then to 250% thereafter. This is a higher level than the previously announced 200%.
President Trump has already implemented item-specific tariffs separately from the reciprocal tariffs that will take effect on August 7. Currently, automobiles and auto parts are subject to a 25% tariff, while steel and aluminum are subject to a 50% tariff. Semiconductors are expected to be added to this list.
The U.S. Department of Commerce has been conducting investigations into strategic items such as semiconductors, pharmaceuticals, and copper based on Section 232 of the Trade Expansion Act. This provision allows the president to impose import restrictions, including tariffs, if the import of certain items is deemed a threat to national security.
Since semiconductors, along with automobiles, are key export items for Korea, there are concerns that major Korean companies such as Samsung Electronics and SK Hynix could suffer significant damage if the U.S. actually imposes tariffs.
On July 30, Korea lowered its item-specific tariff on automobiles to 15%, the same level as Japan and the European Union (EU), in accordance with a trade agreement with the United States. Although Korea was promised most-favored-nation status for semiconductor items in the event of future tariffs, an increase in tariffs is inevitable, and disruptions to overall exports to the U.S. are expected.
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