Investing.com-- U.S. President Donald Trump repeated his plans for tariffs against America’s biggest trading partners during an address to Congress on Tuesday evening, while also criticizing government subsidies for chipmakers.
His comments came as Trump’s 20% tariffs on China and 25% tariffs on Canada and Mexico took effect earlier in the day, potentially marking the beginning of a global trade war.
Trump said reciprocal tariffs against major economies- which will match their tariffs on U.S. exports- will take effect from April 2. He lambasted unfair trading conditions for U.S. companies, citing India and South Korea’s automobile duties as an example.
“We’ve been ripped off for decades, and we will not let that happen any longer,” Trump said. “Tariffs are about making America rich again, making America great again.”
Trump also said he wants to make interest payments on American-made automobiles tax deductible.
Trump claimed that his policies will benefit American farmers, but warned that there would be a bit of an “adjustment period” after he announced tariffs on agricultural imports, beginning from April 2.
On the CHIPS act, Trump called the legislation a "horrible, horrible thing," criticizing the Biden administration for allowing billions of dollars to be spent on what "doesn’t mean a thing."
Trump argued that the funds could be better deployed towards reducing national debt, calling on Congress to get rid of the CHIPS Act and use whatever is left over to "reduce debt."
The CHIPS Act was signed by the Biden administration to boost U.S. chip manufacturing, and included nearly $100 billion in government subsidies to build chips in the U.S.
Major beneficiaries of the act include Intel (NASDAQ: INTC ), TSMC (NYSE: TSM ), Samsung Electronics (KS: 005930 ) and Texas Instruments (NASDAQ: TXN ). U.S. chip production has come into renewed focus in recent years with the advent of artificial intelligence, especially as the the U.S. attempts to cut China off from access to advanced chip technology.
In his first address to a joint session of Congress since taking office in January, Trump outlined what he touted as major achievements for his administration over the past six weeks, which included stricter border controls, measures to increase domestic energy production, and cuts to government spending.
Trump reiterated his plans for sweeping tax cuts, calling on the Democrats to also vote in favor of a proposed tax cut bill.
But Trump also claimed he will soon balance the federal budget, despite a tax cut plan endorsed by him set to add trillions to the U.S. budget deficit.
“We want to cut taxes on domestic production and all manufacturing,” Trump said, claiming that the tax cuts will be retroactive to January 20, 2025.
Trump kept up his criticism of the Biden administration and the Democrats, claiming they were responsible for recent increases in inflation, such as higher egg prices. Trump also criticized policies of ‘Diversity, Equity and Inclusion,’ claiming that the country will be “woke no longer.”
Trump’s second term so far has been headlined largely by higher trade tariffs, along with funding cuts for several government agencies and the scaling back of domestic regulation.
The U.S. President listed a slew of alleged fraud and wasteful spending identified by his Department of Government Efficiency, which is led by Tesla (NASDAQ: TSLA ) CEO Elon Musk, who was present at the address. He lauded Musk for his efforts to cut government spending.
On the immigration front, Trump said he will maintain a hardline on securing America’s borders. He also said that his administration’s recently introduced “Gold Card”- a $5 million U.S. visa- was set to come into effect soon.