- President Trump cites national security for new round of tariffs.
- Shares of pharmaceutical firms from Hong Kong to India slide.
- 100% duty on branded drugs waived if ground broken on US factory.
WASHINGTON: President Donald Trump on Thursday unveiled a fresh round of punishing tariffs on a broad range of imported goods, including 100% duties on branded drugs and 25% tariffs on heavy-duty trucks, set to come into force next week.
Tariffs have been a feature of Trump’s second term, with sweeping duties on trading partners ranging from 10% to 50% and other targeted levies on a wide variety of products, casting a shadow over the global economic outlook and paralysing business decision-making.
The announcements, made on Truth Social, did not include details about whether the new levies would apply on top of national tariffs or whether economies with trade deals such as the European Union and Japan would be exempted. Tokyo said it was still analysing the potential impact of the new measures.
Trump also said he would start charging a 50% tariff on kitchen cabinets and bathroom vanities and a 30% tariff on upholstered furniture, with all the new duties to take effect from October 1.
“The reason for this is the large scale “FLOODING” of these products into the United States by other outside Countries,” Trump said on Truth Social of the tariffs on household goods.
Stocks of pharmaceutical companies across Asia sank as investors reacted to the news, with Australia’s CSL hitting a six-year low, Japan’s Sumitomo Pharma4506.T tumbling more than 5% and Hong Kong’s Hang Seng Biotech Index down about 2.5%.
An index tracking Chinese-listed furniture makers. The CSIH30048 also dropped 1.1%.
The new actions are seen as part of the Trump administration’s shift to better-established legal authorities for its tariff actions, given the risks associated with a case before the Supreme Court on the legality of his sweeping global tariffs.
The new 100% tariff on any branded or patented pharmaceutical product will apply to all imports unless the company has already broken ground on building a manufacturing plant in the US, Trump said.
The Pharmaceutical Research and Manufacturers of America, an industry group, said companies “continue to announce hundreds of billions in new US investments. Tariffs risk those plans”.
The Trump administration has opened a dozen probes into the national security ramifications of imports of wind turbines, aeroplanes, semiconductors, polysilicon, copper, timber, lumber and critical minerals to form the basis of new tariffs.
Trump this week announced new probes into personal protective equipment, medical items, robotics and industrial machinery.
Foreign policy tool
Trump has made the levies a key foreign policy tool, using them to renegotiate trade deals, extract concessions and exert political pressure on other countries. His administration has touted tariffs as a significant revenue source, with Treasury Secretary Scott Bessent saying Washington could collect $300 billion by the end of the year.
Trump previously imposed national security tariffs on steel and aluminium and derivatives, light-duty autos and parts, and copper.
The Trump administration’s trade deals with Japan, the EU, and the United Kingdom include provisions that cap tariffs for specific products, suggesting the new higher national security tariffs likely won’t raise it above agreed rates.
Japan is assessing how the new measures relate to its deal, the country’s chief trade negotiator Ryosei Akazawa told a press conference on Friday.
He stressed, however, that tariffs imposed on Japanese drugs would not be higher than those from other countries as Tokyo had secured most-favoured nation status on those items and others.
The US pharmaceutical trade group said earlier this year that 53% by value of the $85.6 billion in ingredients used in medicines consumed in the United States was manufactured in the US with the remainder from Europe and other US allies.
When it comes to furniture, imports to the United States hit $25.5 billion in 2024, up 7% from the year prior. About 60% of those imports came from Vietnam and China, according to Furniture Today, a trade publication.
Trump in August had promised to impose new furniture tariffs, saying it “will bring the Furniture Business back” to North Carolina, South Carolina and Michigan.
Furniture and wood products manufacturing employment in the US has halved since 2000 to around 340,000 today, according to government statistics.
Inflation pressure
Higher tariffs on commercial vehicles could put pressure on transportation costs just as Trump has vowed to reduce inflation, especially on consumer goods such as groceries.
Trump said the new heavy-duty truck tariffs were to protect manufacturers from “unfair outside competition” and said the move would benefit companies such as Paccar-owned Peterbilt and Kenworth and Daimler Truck-owned Freightliner.
The US Chamber of Commerce earlier urged the department not to impose new truck tariffs, noting the top five import sources are Mexico, Canada, Japan, Germany, and Finland “all of which are allies or close partners of the US posing no threat to US national security.”
Mexico is the largest exporter of medium-and heavy-duty trucks to the United States. A study released in January said imports of those larger vehicles from Mexico have tripled since 2019.
Mexico has opposed new tariffs, telling the Commerce Department in May that all Mexican trucks exported to the United States have on average 50% US content, including diesel engines.
Chrysler-parent Stellantis is among companies that produces heavy-duty Ram trucks and commercial vans in Mexico.
Last year, the US imported almost $128 billion in heavy vehicle parts from Mexico, accounting for approximately 28% of total US imports in the category, Mexico said.
