Donald Trump is at it again, threatening to impose sweeping 25% tariffs on automobile, semiconductor, and pharmaceutical imports, with a formal announcement as early as 2 April. This would mark a dramatic escalation of his trade war, building on the 25% tariffs on steel and aluminium already set to take effect in March.
The logic? Well, in classic Trumpian fashion, it seems to be a mix of economic nationalism, political theatrics, and a misguided attempt to strong-arm trading partners into submission. Speaking from Mar-a-Lago, Trump proudly announced that foreign carmakers could avoid tariffs altogether—if they simply moved production to the U.S. How generous.

The consequences, however, could be catastrophic for global supply chains. Last year, the U.S. imported around 8 million cars and trucks, accounting for half of all domestic vehicle sales. European automakers like Volkswagen and Hyundai Motor would be particularly hard hit. The ripple effects would also devastate Asian semiconductor manufacturers and global pharmaceutical suppliers, leading to higher costs for consumers across the board.

And yet, key details remain a mystery. Will tariffs apply universally or target specific countries? Will Mexico and Canada, bound by trade agreements, be exempt? Investors have reacted with predictable unease, with Asian markets slipping and corporate leaders scrambling to assess the damage.

This latest tariff barrage expands Trump’s trade war well beyond China, dragging the entire Asia-Pacific region into the fight. Countries like Mexico and South Korea, where auto exports to the U.S. account for 2.4% and 1.8% of GDP respectively, stand particularly vulnerable.
The semiconductor industry faces seismic disruption, with Malaysia and Singapore—both major chip exporters—directly in the firing line. Malaysia, the world’s sixth-largest semiconductor exporter, shipped a record $136 billion worth of chips in 2024. Meanwhile, Singapore had only just announced a $744 million investment in semiconductor R&D before Trump’s latest tariff tantrum sent shockwaves through the industry.
Japanese automakers are also bracing for impact. Exports to the U.S. constitute Japan’s largest outbound trade sector, and Washington remains Tokyo’s biggest market. According to Bloomberg Intelligence, a 25% tariff could erase a third of Toyota’s projected profits for 2025 and nearly half of Honda’s.

Industry leaders, trade groups, and economists have all warned that these tariffs will inflict widespread collateral damage, raising consumer costs and compounding inflationary pressures. The response from foreign governments has been swift: many are preparing retaliatory measures, vowing to target U.S. exports, particularly in politically sensitive Republican states.
Meanwhile, the EU’s top trade official is rushing to Washington in a last-ditch attempt to stave off an economic showdown. However, Trump has clarified that no country can negotiate out of these tariffs unless he deems the trade relationship “balanced.”
This latest economic gamble follows Trump’s earlier threats of 10% tariffs on China, 25% tariffs on Canada and Mexico, and a new layer of “reciprocal tariffs” across all imports. If all these measures pile up, exporters from North America, Europe, and Asia could pay three separate rounds of duties to access the U.S. market.

Should Trump follow through on these threats, the entire structure of global trade could be reshaped—and not for the better. Supply chains would be upended, U.S. consumers would bear the brunt of price hikes, and economic uncertainty would deepen.
No one is getting out of this unscathed. We know from history that these tariffs never work, but Trump thinks they will.
Yet, despite overwhelming evidence that tariffs rarely achieve their intended goals, Trump is doubling down—betting that economic disruption, higher costs, and global retaliation will somehow “Make America Great Again.” If that sounds like a losing strategy, that’s because it almost certainly.