The United States on Monday escalated trade tensions by launching national security investigations into pharmaceutical imports and semiconductor equipment, potentially paving the way for new tariffs as global markets brace for further economic uncertainty.

Commerce Secretary Howard Lutnick confirmed the probes, which follow weeks of speculation that the Biden administration would widen its tariff strategy. The move comes amid efforts to bolster domestic manufacturing and reduce reliance on foreign supply chains.

The investigations were announced as Treasury Secretary Scott Bessent signaled optimism over bilateral trade negotiations. He told Bloomberg TV that “there's a big deal to be done” with China but gave no timeline. Talks are underway with Vietnam, with Japan scheduled next and South Korea the following week.

Despite the trade war’s widening scope, Wall Street rallied. The Dow Jones Industrial Average and S&P 500 each rose just under 1% Monday, building on earlier gains in Asian and European markets. The rebound was fueled in part by temporary exemptions issued Friday on high-tech imports such as smartphones, semiconductors, and computers.

Still, President Donald Trump warned Sunday that those exemptions may be short-lived. He said new tariffs on semiconductors and other tech goods would be announced “over the next week.”

White House spokesman Kush Desai reinforced the administration’s urgency. “The entire administration is committed to working on Trump Time” — apparently referring to moving quickly — on the matter, he told AFP.

Lutnick said the tariffs would likely be in place “in a month or two,” further raising stakes for U.S. tech giants like Apple and Nvidia, which manufacture premium products in China.

Trump’s shifting tariff strategy began April 2 with sweeping duties on many countries, later narrowed to target China more aggressively. U.S. tariffs on Chinese goods have reached 145%, while China retaliated with a 125% barrier on American imports.

Speaking Monday at the White House, Trump hinted at possible relief for automakers hit by his 25% tariff on foreign vehicles. “I don’t want to hurt anybody,” he said. “I’m very flexible” and “looking at something to help some of the car companies.”

In Asia, Chinese President Xi Jinping cautioned against deepening trade disputes as he began a Southeast Asia tour in Vietnam. “Protectionism will lead nowhere” and a trade war would “produce no winner,” he said.

The administration maintains that tariffs are intended to bring back critical manufacturing and restore U.S. economic strength. “The lack of supply is one of the reasons for having the EERI natural gas facilities to fill in the 1,200 MW of its contracted capacity,” Energy Assistant Secretary Mario Marasigan said in a separate industry-related statement Monday.

Meanwhile, EU trade chief Maros Sefcovic, after meeting with Lutnick and U.S. trade envoy Jamieson Greer, said “the EU remains constructive and ready for a fair deal.” He proposed a “zero-for-zero” industrial tariff framework but acknowledged on social media that “achieving this will require a significant joint effort on both sides.”

More than two dozen countries are now negotiating to avoid U.S. tariffs before the 90-day exemption period ends.

Japanese Economic Revitalization Minister Ryosei Akazawa will visit Washington this week to address auto-sector concerns amid rising costs.

As markets respond to daily shifts in U.S. trade policy, analysts warn that volatility could deter investment and dampen global growth, particularly in high-tech sectors where Asian manufacturers dominate.