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President Donald Trump has been talking about tariffs for so long that it feels like we know exactly what’s coming. But we kind of have no idea.
Trump has repeatedly thrown out some now-familiar numbers: 25% tariffs on all imports from Mexico and Canada, anywhere from 10% to 60% across-the-board tariffs on China and 10% or 20% tariffs on everything else that comes into the United States. He has said tariffs on products from Mexico, Canada and China are coming as soon as this week. And in a trade war that lasted about 10 hours, Trump announced and then rescinded tariffs on Colombia.
Still, the specifics around timing and scope have remained something of a mystery. It hasn’t helped that Trump has already walked back some of his most aggressive trade proposals and that his administration has been inconsistent on the messaging.
But Trump laid out his clearest message yet on tariffs during an address to House Republicans on Monday, spelling out what imports his administration plan to tax first.
“We are going to look at pharmaceuticals, drugs, we are going to look at chips, semiconductors and we are going to look at steel and some other industries and you are going to see things happening,” Trump told House Republicans. “The only way to get out of this is to build your plant if you want to stop paying taxes or tariffs, build here in America.”
So, Trump’s portrait of tariffs is coming into clearer focus: Start with some high-profile items and build upon them over time. That’s similar to how he approached Colombia in a short-lived spat over deportations: Institute smaller tariffs at first that escalate over the course of days and weeks to ramp up the pressure.
However, Trump’s new Treasury Secretary Scott Bessent, who will be in part responsible for implementing the tariffs and setting policy, seemed to have another plan in mind. Bessent agreed with the incremental and escalating plan but favors starting at a lower tariff rate and ramping that up, as opposed to broadening the number of products that would receive the tariffs.
Specifically, Bessent plans to start tariffs at 2.5% and gradually increase them, according to the Financial Times. But Trump told reporters on Air Force One Monday that he would reject that plan.
“No, that would not be acceptable to me,” Trump told reporters. Trump added that he would want it to be “much, much bigger.”
Behind motor vehicles, the $229 billion worth of products classified as pharmaceuticals and medicines were the top category of goods the United States imported last year through November, the most recent month of available data, according to federal trade data from the Commerce Department. With exports of $69 billion, Ireland was the top country that exported these products to the US. China was the eighth country on the list with $11 billion worth of exports to the US last year.
The US imported $51 billion worth of medical supplies from Mexico and China last year – the top two exporting countries – accounting for $18 billion worth of these products.
Trump’s proposal to impose tariffs on pharmaceuticals could run counter to his promises to lower prescription drug prices.
Products classified as “semiconductors and other electronic components” were the sixth top category of goods the US imported last year, valued at $126 billion. Exports from Taiwan accounted for over a fourth of that total.
Semiconductors are used in everything from computers to cellphones to cars. Therefore, tariffs on them could raise the price US consumers pay for these goods.
Trump placed tariffs on steel imports during his first administration, and the Biden administration doubled down on those. But those actions accomplished little to bolster America’s domestic steel business evidenced by the financial struggles of US Steel, which was once the largest company in the world, but is now a shadow of its former self.
In total, the US imported $32 billion worth of iron, steel and ferroalloys, or raw materials carrying a mixture of iron and steel. With exports valued at $7 billion, Canada was the top country shipping these goods to the US, followed by Brazil and Mexico.
Last year the US imported $3.6 billion worth of steel products from other countries. Steel products shipped from China and Canada accounted for over a fourth of that total.
Tariffs could raise prices for American consumers. Importers not the countries that export the goods pay the tariffs, and those companies often pass the cost of tariffs on to customers.
However, the lack of clarity about Trump’s plans even as we get closer to the February 1 date that Trump has set for tariffs on Mexico, Canada and China shows that the overall impact of tariffs on the economy and American consumers is still very much up in the air.
The Colombia incident and many past examples of Trump’s unrealized tariff threats prove the president often uses export taxes as a negotiating tactic a cudgel to wield against countries to get them to come to the table.
But Trump on Monday called “tariff” the fourth-most beautiful word in the dictionary, behind “God,” “love” and “religion.” That doesn’t mean tariffs are definitely about to be put in place in exactly the manner that Trump has said they would. But expect to hear a lot more about tariffs and perhaps see some put in place in the days, weeks, months and four years to come.
