US President Donald Trump on Thursday announced new punitive tariffs on a wide range of imported goods to come into effect on October 1.
These include tariffs of 100% on branded pharmaceutical drugs, 50% on kitchen cabinets and bathroom vanities, 30% on upholstered furniture, and 25% on heavy-duty trucks.
The announcements did not specify whether the new tariffs would apply in addition to other national tariffs or whether countries and regions with trade deals, such as the European Union and Japan, would be exempted. The United States is the largest export market for the German pharmaceutical industry.
What did Trump say about new tariffs?
Trump said a new tariff of 100% will be applied to all branded or patented pharmaceutical products imported into the United States, unless the company has already started building a manufacturing plant in the country.
Announcing tariffs on furniture, Trump wrote on Truth Social that the reason for this was the large-scale “flooding” of such products into the United States by other countries, and stated that taxes on imported kitchen cabinets and sofas were needed “for national security and other reasons.”
In August, the president vowed to impose new furniture tariffs, arguing they would “bring the Furniture Business back” to North Carolina, South Carolina and Michigan.
Trump stressed that the new tariffs on heavy-duty trucks were intended to protect US manufacturers from “unfair outside competition,” and that companies such as Paccar-owned Peterbilt and Kenworth, as well as Daimler Truck-owned Freightliner, would benefit from the move.
The US Chamber of Commerce had called on officials not to impose new truck tariffs. It said the top five truck import sources were Mexico, Canada, Japan, Germany and Finland “all of which are allies or close partners of the United States posing no threat to US national security.”
Asian shares fell after announcement
Following Trump’s announcement of new tariffs, shares in pharmaceutical companies across Asia tumbled, with Japan’s Topix Pharmaceutical Index closing down 1%. Meanwhile, the Hong Kong-listed innovative drug index fell by 2.8%.
Shares in South Korea’s SK Biopharmaceuticals dropped by 2.7%, while Australia’s CSL biotech firm finished the day down 1.6%, having slumped by over 3% earlier in the session. An index tracking Chinese furniture manufacturers also dropped by 1.1%.
Trump has elevated tariffs to a pivotal foreign policy instrument, using them to renegotiate trade agreements, extract concessions, and exert political pressure on other nations. Previously, he imposed national security tariffs on steel, aluminum, light-duty automobiles and parts, and copper.
However, the Trump administration’s trade deals with Japan, the European Union (EU), and the United Kingdom include provisions that cap tariffs on specific products, such as cars, semiconductors, and pharmaceuticals. Therefore, the new, higher national security tariffs are unlikely to raise rates above those agreed upon.
Edited by: Sean Sinico
