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Trump Proposes 25% Tariffs on Cars, Chips, Pharma Products

KEY POINTS

New tariffs part of broader plan for 'reciprocal' trade barriers and duties.
25% steel and aluminum duties, set to take effect in March spark industry concerns.
Health systems use SRS tariff reports to gauge exposure.

By Lauren Palmer February 20, 2025

President Trump’s new tariffs on autos, chips and pharmaceuticals, alongside existing metal duties, raise concerns for medical device manufacturing and power grid stability.

President Trump announced plans Tuesday to impose tariffs of 25% or higher on imported automobiles, semiconductors, and pharmaceutical products, a significant expansion of his administration’s trade policies. Speaking at Mar-a-Lago, Trump said the tariffs could increase “very substantially” throughout the year, while noting U.S. companies may receive a phase-in period to relocate production domestically.

The announcement follows Trump’s signing of a “reciprocal tariffs” memorandum, which directs Commerce Secretary nominee Howard Lutnick to develop a framework matching U.S. duties with those imposed by trading partners. The directive, due April 1, aims to equalize tariffs and address what the administration describes as unfair trade barriers. “We want a level playing field,” Trump said.

The timing coincides with critical diplomatic engagements, including talks with EU trade commissioner Maroš Šefčovič and Indian Prime Minister Narendra Modi. While Trump indicated the EU had agreed to reduce auto tariffs – a claim EU officials dispute – Modi struck a more collaborative tone, proposing to double bilateral trade to $500 billion by 2030.

Market analysts warn that the 25% steel and aluminum tariffs, set to take effect in March, could strain critical infrastructure and technology sectors. Jeff Currie, Carlyle’s chief strategy officer of energy pathways, notes the metal tariffs could exacerbate existing shortages of electrical transformers, affecting data center expansion at a time when major tech companies already struggle with cloud computing capacity.

The medical sector has also sounded alarms, with the American Hospital Association emphasizing that the metals are essential in producing a wide range of medical devices, including surgical instruments, prosthetics, implants, crutches, wheelchairs, plates, and screws.

“The tariffs could drive up drug prices for US patients, exacerbate drug supply shortages, and push manufacturers to seek alternative markets,” said Ophelia Chan, senior business fundamentals analyst at GlobalData.

Healthcare executives are urgently assessing supply origins and exploring near-shore manufacturing. Key SRS reports are assisting health systems by mapping their purchased products, offering crucial insights into their supply chain footprint:

“Products by Country (Tariff Risk)” – choose any country to see which items you buy are manufactured there (in the Prevent dashboard)
“Products Subject to Section 301 China Tariffs” – downloads current section 301 tariffs on healthcare item made in China (in the Prevent dashboard)
“Products Sites and Risks” – lists manufacturing location for all items you buy from the supplier (in the Prevent dashboard after you drill down on a supplier)
“Supplier Geopolitical Summary” – summarizes exposure for all countries (in the Respond dashboard)

If you have not yet tailored SRS to list manufacturing sites for the products you buy, it’s simple to do so if you have a subscription to SRS. Email support@supplyrisk.com for instructions.

For more information, see:

CNBC, Trump suggests 25% tariffs on autos, pharma and semiconductors that could go even higher, February 19

MSN, Trump proposes 25% tariff on cars, pharmaceutical products, and more, February 19

The Irish Times, Trump floats 25% tariffs on US car, drug, chip imports, February 19

Beckers Hospital Review, Aluminum, steel tariffs expected to impact medical devices, February 14

CNBC, U.S. and India to double bilateral trade in five years, Prime Minister Modi says, as Trump tariffs loom, February 14

CNBC, Trump metal tariffs could slow data center growth and disrupt power grid, analyst says, February 13

CNBC, Trump signs sweeping reciprocal tariff plan, says more coming, February 13

Supply Risk Solutions, China Counters U.S. Tariffs with Targeted Tariffs, Export Controls, and Investigations, February 4

Reuters, Trump pauses tariffs on Mexico and Canada, but not China, February 3

Supply Risk Solutions, Trump Delays Tariffs on Mexico and Canada, February 3

Supply Risk Solutions, U.S. to Impose Tariffs on Key Trading Partners Feb. 1, February 1