Donald Trump announces 100% tariff on branded pharmaceutical products
The US president also unveiled levies on heavy trucks, kitchen cabinets and bathroom vanities
Donald Trump has announced tariffs of 100 per cent on medicines and pharmaceutical goods imported into the US in a sudden escalation of his global trade war.
The levies will be imposed on all branded or patented pharmaceutical goods from October 1, the president wrote in a Truth Social post on Thursday.
Exemptions would be offered to companies actively building new manufacturing sites in the US. This will be “defined as, ‘breaking ground’ and/or ‘under construction’,” Trump wrote. “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
The latest salvo came as part of a series of late-night posts in which Trump also imposed fresh tariffs on heavy trucks, kitchen cabinets, bathroom vanities and furniture.
The move will rattle the global pharmaceutical and automotive industry, and inflame tensions with US trading partners.
Heavy trucks made overseas will be subject to a 25 per cent tariff, while cabinets, bathroom vanities and “associated products” will be hit with a levy of 50 per cent and upholstered furniture with 30 per cent.
The US launched a national security probe that could lead to tariffs on pharmaceutical products earlier this year, but it is unclear if the tariffs Trump will apply are part of the outcome of that investigation.
He has also touted plans to allow companies more time to build manufacturing plants in the US.
Trump roiled global markets in April after unveiling steep “reciprocal” tariffs on almost every trading partner, before suspending the levies and reapplying them at slightly lower rates later in the year.
Pharmaceutical goods are exempt from those reciprocal tariffs, meaning many drugs will face steep levies for the first time when they come into effect in less than a week.
The tariffs announced by Trump on Thursday do not apply to generic drugs, meaning off-brand medicines can still be imported to the US without being subject to the “reciprocal” duties.
In Japan, shares in Sumitomo Pharma, which sells prostate cancer and bladder treatments in the US, fell 5 per cent on Friday, while Otsuka Holdings and Roche-controlled Chugai Pharmaceutical fell 4.1 per cent and 2.8 per cent, respectively.
Tokyo’s chief trade negotiator Ryosei Akazawa has insisted that the US has given Japan most favoured nation status on levies on semiconductors and drugs, meaning they would not be higher than those applied to other nations or blocs.
The EU said that the US agreed levies on pharmaceutical goods would not exceed 15 per cent but it remains unclear how Japanese branded drug imports to the US will be treated as a result of Trump’s latest social media post.
Some Japanese pharmaceutical groups have already made big commitments to invest in US production such as Takeda, which announced in May a $30bn investment plan in the country over the next five years. Its shares were flat on Friday.
Trump framed his tariffs on trucks and bathroom cabinets as a matter of national security. “We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!” he wrote on social media.
He accused “other outside countries” of “large scale ‘FLOODING’” of cabinets and furniture into the US and said America’s manufacturing processes should be protected.