On Monday, the United States allowed taxes on pharmaceuticals and high-end technology, adding to the uncertainty engulfing the world economy in a trade battle that Chinese leader Xi Jinping has warned can have “no winner.”
After weeks of indications such a move was coming, the US commerce secretary formally announced “national security” investigations into pharmaceutical imports, and another on semiconductors and chip-making equipment.
The specter of a broadening tariffs onslaught came as Treasury Secretary Scott Bessent touted momentum in talks with individual countries on reaching trade deals — but with little detail offered.
On China, he said “there’s a big deal to be done” but was notably vague about the timing or chances of it happening. Talks have begun with Vietnam and were to start with Japan on Wednesday, then South Korea next week, Bessent told Bloomberg TV.
Investors were relieved at the apparent easing of pressure in President Donald Trump’s wide-ranging but often chaotic attempt to reorder the world economy by using tariffs to force manufacturers to relocate to the United States.
As markets welcomed more accommodative signals from the Trump administration regarding exemptions for essential equipment, Wall Street equities ended the day Monday firmly up. The markets in Europe and Asia were also expanded.
White House spokesperson Kush Desai told AFP on Monday that “the entire administration is committed to working on Trump Time”—ostensibly meaning acting quickly—on the issue, demonstrating Trump’s continued insistence that the tariffs will restore vital manufacturing.
Tit-for-tat exchanges have seen US levies imposed on China this year rise to 145 percent, and Beijing setting a retaliatory 125 percent barrier on US imports.
Late Friday, US officials announced exemptions from the latest duties against China and others for a range of high-end tech goods such as smartphones, semiconductors and computers.
But Trump suggested Sunday that the exemption would be only temporary and that he still planned to put barriers up on imported semiconductors and much else.
In response, South Korea — a major exporter to the United States and home to the world’s largest memory chip maker Samsung — announced on Tuesday plans to invest an additional $4.9 billion in its semiconductor industry.
The South Korean finance ministry said “growing uncertainty” over US tariffs had left the country’s powerful industry clamoring for support.
On Monday, Trump once again pivoted to suggesting possible compromise, saying in remarks at the White House that he was “very flexible” and “looking at something to help some of the car companies” hit by his 25 percent tariff on all auto imports.
“I don’t want to hurt anybody,” he said.
China’s Xi, who kicked off a Southeast Asia tour with a visit to Vietnam, warned Monday that protectionism “will lead nowhere” and a trade war would “produce no winner.”
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