In a fresh turn in his ever-evolving trade policy, U.S. President Donald Trump has hinted at potential tariff relief for automakers, even as his administration accelerates plans to impose new levies on semiconductors and pharmaceuticals.
Speaking from the White House on Monday, Trump acknowledged that automakers sourcing parts from Canada and Mexico need more time to restructure their supply chains. “I’m looking at something to help some of the car companies,” he said, though he stopped short of offering specifics.
The latest move comes just days after the administration excluded smartphones, tablets, and other electronics from a sweeping 125% tariff on Chinese goods. Trump indicated that instead, these products would fall under an upcoming tariff framework targeting semiconductors. He also noted discussions with Apple CEO Tim Cook and emphasized his openness to flexibility in trade matters. “I don’t change my mind, but I’m flexible,” Trump said. “You can’t just have a wall.”
Under Trump’s directive, the Department of Commerce is initiating Section 232 investigations—usually reserved for national security matters—into the importation of semiconductors and pharmaceuticals. The same legal mechanism was previously used to justify sweeping tariffs on steel, aluminum, and autos.
A Federal Register notice confirmed that a three-week public comment period on these probes will begin Wednesday.
Trump defended his plan for pharmaceutical tariffs as a way to force drug manufacturers to bring operations back to U.S. soil. “Pharmaceuticals, we’re going to do,” he said. “The higher the tariff, the faster they come.”
Since reclaiming office in January, Trump has aggressively rolled out tariffs, often shifting direction without warning. On April 2, he announced heavy tariffs on nearly every global trading partner—going so far as to include an uninhabited Antarctic island—before walking back the decision days later with a universal 10% rate, while intensifying tariffs on China.
Earlier in the year, he also wavered on tariffs for Canada and Mexico, ultimately imposing 10% on oil, gas, and potash, and 25% on other goods—exempting USMCA-covered products in theory, but maintaining separate 25% levies on Canadian and Mexican autos, steel, and aluminum.
David Adams, president of Global Automakers of Canada, said Trump’s Monday comments remain vague. However, he argued that the current tariffs violate the USMCA deal Trump himself signed. Flavio Volpe, who leads Canada’s auto-parts industry group, said Trump’s remarks suggest he now grasps the depth of U.S. dependence on foreign partners in auto manufacturing.
“It’s an acknowledgment of how critical Canada, Mexico, and even China are to our auto supply chain,” Volpe said. “But whether he uses that knowledge constructively—that’s another story.”
Ontario, home to many Canadian auto facilities, has already felt the sting of these policies. Two temporary shutdowns—at Stellantis’s Windsor plant and GM’s Ingersoll facility—have led to thousands of layoffs.
Auto parts have so far avoided direct tariffs, allowing U.S. assembly lines to continue running. But industry leaders like Linamar’s executive chair, Linda Hasenfratz, warn that moving operations to the U.S. would cost billions and isn’t realistic for long-term strategy, especially given the volatility of the tariff regime.
Meanwhile, pharmaceutical tariffs could strike a blow to Canadian drugmakers, particularly those supplying affordable generics. U.S. patients, already grappling with the world’s highest medication prices, could face further strain.
Inu Manak of the Council on Foreign Relations questioned the legality of Trump’s aggressive Section 232 use, especially if he bypasses the full investigative process. “This is supposed to be a real investigation,” she said. “And I don’t see them using it that way.”