US President Donald Trump said on Monday he intended to put tariffs on a wide swath of products and basic materials in American life, a prospect that could lead to prices shooting higher for US consumers.
“In particular, in the very near future, we’re going to be placing tariffs on foreign production of computer chips, semiconductors and pharmaceuticals, to return production of these essential goods to the United States of America,” Trump said during an appearance before House Republicans holding their annual party retreat in Doral, Florida.
“We’re going to look at chips, semiconductors, and we’re going to look at steel and some other industries. You’re going to see things happening.”
Trump also listed aluminum and copper as potential tariff targets as “things that we need for our military.”
If he follows through, the tariffs could have a big impact on Americans’ costs of living.
Trump has often incorrectly said tariffs — charges put on goods imported into the US — are paid by the country the goods originate from. Companies that bring in the goods actually pay the tariffs.
Economists are almost unanimous that tariffs are passed from those companies to shoppers in the form of higher prices on store shelves. A survey of a panel of economists by the University of Chicago found 95% agreed that tariffs are passed on.
Trump during the campaign threatened 10% tariffs on almost all imports and higher ones on Chinese imports in particular. But he has taken a more measured approach since being sworn in on January 20.
The conservative American Action Forum in a study projected the broad tariffs would cost US households between $1,700 and $2,350 a year, depending on whether other countries retaliated, as Colombia President Gustavo Petro threatened to do.
He has threatened to impose tariffs on Chinese and Mexican goods starting on Feb. 1, and took the same tack in a brief international spat with Petro on Sunday night.
Trump’s rhetoric on Monday may have been more economic saber rattling. But if he followed through, the implications for household items like computers or cellphones could be huge.
Production of computer chips, semiconductors and drugs has moved to Taiwan, Trump said, “And we want them back.”
He criticised one of former President Joe Biden’s signature bills, a bipartisan one named the “CHIPS and Science Act” that provided incentives for companies to manufacture computer chips in the US.
Instead, Trump said, companies would be willing to build plants in America because “they’re not going to want to pay a 25%, 50% or 100% tax.”
“They’re going to build their factory with their own money. We don’t have to give them money,” he said.
Trump’s appearance at the annual event was meant to unify and pump up the rank-and-file members for the tough political battles ahead as Republicans try to finally settle on the specifics of what they will pass on border security policy, boosting defense spending, taxes, and possibly hiking the limit on the US government’s debt.
But Trump did little to clear the air in a fundamental divide between the Senate Republican Party with some conservative and libertarian House Republicans and most House Republicans: whether to have multiple separate bills carrying different items or one catch-all bill with all of them.
“Whether it’s one bill, two bills, I don’t care. Let these guys, they’re going to work it out,” he said.
Noting the razor-thin margin held by Republicans, 218 seats to the Democrats’ 215, Trump urged unity.
“We have a chance to win like never before. As long as we stay united, the 119th Congress will be remembered as the most successful and accomplished Republican majority in American history,” Trump said.