US President Donald Trump has announced a 100% tariff on pharmaceutical imports, while a 25% tax has been imposed on heavy-duty trucks, which will come into effect next week.
According to NDTV’s report, India’s pharmaceutical industry heavily relies on trade with the US; this decision could significantly impact the drug manufacturing sector.
According to the foreign news agency ‘Reuters’, the US had earlier imposed large tariffs up to 50% on trade partners and other specific taxes on imported goods like steel. This is another major blow to global trade, which is already suffering from disrupted supply chains, rising costs, and consumer uncertainty arising from Trump’s trade war.
These measures have negatively impacted global growth. According to the Federal Reserve, they are also increasing prices for American consumers, while Trump claims these actions are to protect the US manufacturing industry and national security.
BMO Economics said in a note that after this announcement, a downturn was observed in Asian stock markets, especially shares of pharmaceutical companies dropped. However, European shares recovered from initial losses as uncertainty remains over how widely these tariffs will be applied.
It was further stated that mixed US equity futures suggest that investors are largely ignoring Trump’s latest tariff announcement.
According to the report, Trump’s announcement on Truth Social did not clarify whether these new taxes will be in addition to existing national tariffs or not. In recent trade agreements with Japan, the European Union, and the United Kingdom, a limit on tariffs on specific products like pharmaceuticals has been set.
In an informal preliminary trade agreement between the European Union and the US, a maximum overall tariff limit of 15% was agreed upon. However, Trump has not yet signed any executive order to ratify this agreement.
The European Commission said on Friday that the agreement clearly sets a 15% overall tariff limit.
Japan’s trade negotiator Ryoichi Akazawa said that under Japan’s agreement, its tariff rate will not be higher than that of the European Union and other countries.
Trump said that the 100% tariff on medicines will only apply to companies that have not yet started building manufacturing plants in the US. Several pharmaceutical companies have already announced multi-billion dollar investments in the US, and Switzerland’s Roche emphasized that one of its American units has recently begun work on a new factory.
Similarly, the pharmaceutical company Novartis, which has promised major investment in the US, did not respond to a request for comment.
