Auto, pharma, semiconductor tariffs could have repercussions for over $400 bn trade: MC Analysis

US President Trump

US President Donald Trump’s decision to impose tariffs on auto, pharma, and semiconductor imports is likely to have repercussions for 13 percent or more than $400 billion of trade headed to the North American nation, according to a Moneycontrol analysis.

In an executive order signed earlier this week, the US president announced reciprocal tariffs on auto, pharmaceutical and semiconductor imports starting April.

While the move will undoubtedly impact China, Canada and Mexico, analysis showed that India, Israel, Malaysia and allies like Korea, Germany and Japan will also be affected.

Take the case of medicines and vaccines. While Portugal, Italy and Singapore were top exporters of vaccines to the US, India, Switzerland, and Ireland exported the most medicines to Washington.

In 2023, the US accounted for 40 percent of India’s exports of medicines and a third of its vaccine exports.

The order for semiconductors is expected to affect Taiwan, Malaysia, and Korea, which accounted for 58 percent of the total US imports.

Nearly half of Korean panels were headed to the US.

But data indicated that smaller countries like Cambodia are likely to be more affected by the US decision. Cambodia, although not a top exporter of semiconductors to the US, was most reliant for its imports as over 95 percent of its product was headed to American shores.

Car makers from Japan, Korea, Germany, and the UK are also in for a bumpy ride, as these countries account for 52 percent of the United States' car imports.

The new threats add to the earlier ones made by the US with respect to China, Canada and Mexico. The US President has also imposed tariffs on steel and aluminium since he assumed office in January.

According to an earlier analysis by Moneycontrol, nearly $2 trillion of global trade was already under threat owing to tariffs by the US.

A Goldman Sachs research indicates that a global tariff war could lower GDP growth by 0.6 percentage points, while a tariff war with India could impact India’s growth by 0.1-0.3 percentage points.

Although the US has agreed to increase bilateral trade with India to $500 billion by 2030, Trump and his team have labelled India as a tariff king.