U.S. President Trump announced on February 18, 2025 that he plans to impose tariffs of approximately 25% on imported automobiles, semiconductors and medicines, and may officially announce the details on April 2.This policy is not only a continuation of its trade protectionism, but also a sign that the global supply chain and trade landscape may usher in a new round of shocks.Although Trump claimed that the move was aimed at "attracting manufacturing back" and "balancing the trade deficit," its far-reaching impact on industries, markets and international relations has sparked widespread controversy.

Policy framework and implementation path

According to Trump's statement at Mar-a-Lago, the automobile tariff rate will be set at around 25%, while taxes on semiconductors and pharmaceuticals may be higher and are planned to increase gradually over the next year.It is worth noting that the new tariff policy is embedded under the framework of "reciprocal tariffs"-that is, the United States will implement the same tax rate based on the tariff levels of its trading partners on its goods, targeting major deficit countries such as the European Union and India.For example, the European Union imposes a 10% tariff on American cars, while the United States currently imposes only 2.5% on European cars. If the principle of reciprocity is implemented, the tax rate will be significantly increased to 10%.In addition, Trump emphasized that companies would be given a "transition period" and that tariffs would be exempted if factories were set up in the United States, trying to force the transfer of the industrial chain through policy leverage.

Which industries will be affected?

The automobile industry bears the brunt.In 2024, the United States will import approximately 8 million cars, accounting for half of its total sales, with European car companies (such as Volkswagen and Stellantis) and Asian companies (such as Hyundai and Toyota) accounting for the highest proportion of imports.Standard & Poor's Global predicts that if tariffs are implemented, European car companies may lose as much as 17% of their core profits, while U.S. companies such as General Motors and Ford, which are highly dependent on the North American supply chain, will also face the risk of rising costs.Although automobiles under the North American Free Trade Agreement may be exempted, policy ambiguity has caused companies to fall into the dilemma of "production transfer and supply chain rupture."

The structural risks in the semiconductor and pharmaceutical industries cannot be ignored.The United States relies on imports for about 30% of its semiconductors, and South Korea (memory chips) and Japan (materials and equipment) will be hit hard.In the pharmaceutical field, the supply chains of Indian generic drugs (accounting for 40% of U.S. imports) and Swiss innovative drugs (such as Novartis and Roche) may be forced to adjust, exacerbating the pressure on domestic drug prices in the United States.Capital Investment warned that if tariffs are imposed across the board, the U.S. inflation rate may jump from 2.6% to 3.2%, far exceeding the Federal Reserve's target.

Market reaction and capital hedging

After the policy statement, the price of safe-haven asset gold surged US$36 in a single day, setting a record high of US$2942 per ounce, reflecting the market's deep concerns about the escalation of the trade war and the economic outlook.At the same time, U.S. stocks showed divergence: although the S & P 500 index hit a new historical high, the Chinese stocks and auto sectors were generally under pressure. General Motors 'share price fell 0.14%, and Tesla fell slightly 0.49%.The Philadelphia Semiconductor Index bucked the trend and rose 1.68%, mainly boosted by Intel's split rumors and local production capacity expectations, but its long-term cost pressure has not dissipated.

Geoeconomic Game and Global Restructuring

Trump's "reciprocal tariffs" strategy is essentially a deterrent game against major trading partners.India has become the top target due to an average tariff of 17%(the United States only 3.3%), and its generic drugs, steel and other industries are likely to be hit with precision.The European Union has been pushed to the center of the storm due to its automobile trade deficit (reaching 28.7 billion euros in 2022). If the two sides cannot reach a compromise on tariff parity, the North American layout of Volkswagen, BMW and other automobile companies may be forced to adjust.In addition, non-tariff barriers (such as technical standards and agricultural product controls) in Japan and South Korea have also been included in the scope of review, further expanding the coverage of trade frictions.

Long-term hidden worries and policy paradoxes

Although Trump views tariffs as a tool for "manufacturing renaissance," economic circles generally question their effectiveness.On the one hand, the cost of tariffs will eventually be passed on to consumers, exacerbating inflationary pressures; on the other hand, the high degree of integration of global supply chains means that "localization" is difficult to achieve overnight-take semiconductors as an example, even if TSMC and Samsung set up factories in the United States, their upstream materials and equipment still rely on Japan, the Netherlands and other countries, and tariffs may delay technological iteration.The more far-reaching impact is that retaliatory tariffs may trigger a contraction in global trade.HSBC analysis pointed out that for every 1% decline in trade volume in history, gold prices rose by an average of 0.5%. The current market has priced this in advance.

All in all, Trump's new tariff policy is not only a continuation of his "America First" strategy, but also a key variable in the restructuring of the global economic and trade order in 2025.In the short term, policy uncertainty will continue to push up market volatility, and safe-haven assets such as gold and government bonds may continue to benefit; in the medium and long term, attention needs to be paid to the actual progress of supply chain migration and the cumulative effect of countermeasures by various countries.

For investors, they need to be wary of industry differentiation caused by tariffs-companies with strong localization capabilities (such as Intel) may receive periodic dividends, while multinational giants (such as Volkswagen and Novartis) will face both cost and market tests.In the rift of globalization, how to balance protectionism and open competition is still an unavoidable proposition for all countries.