Trump announces 100% tariff on branded or patented pharmaceutical imports from Oct 1

WASHINGTON: United States President Donald Trump announced on Thursday (Sep 25) new tariffs on pharmaceuticals, big-rig trucks, home renovation fixtures and furniture.

Starting Oct 1, "we will be imposing a 100 per cent tariff on any branded or patented pharmaceutical product, unless a company IS BUILDING their pharmaceutical manufacturing plant in America", the Republican wrote on his Truth Social platform.

In a separate post, he wrote of a 25 per cent tariff on "all 'heavy (big) trucks' made in other parts of the world" to support US manufacturers such as "Peterbilt, Kenworth, Freightliner, Mack Trucks and others".

He said the truck tariffs were "for many reasons, but above all else, for national security purposes".

Earlier this year, the Trump administration launched a probe into imports of trucks to "determine the effects of national security".

The real estate tycoon also targeted home renovation materials, writing that "we will be imposing a 50 per cent tariff on all kitchen cabinets, bathroom vanities and associated products" as of Oct 1.

"Additionally, we will be charging a 30 per cent tariff on upholstered furniture," he added.

Tariffs have been a feature of Trump's second term, with duties on trading partners ranging from 10 per cent to 50 per cent and other targeted tariffs on a wide variety of products, casting a shadow over the global economic outlook and paralysing business decision-making.

The announcements 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.

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 Trump administration has opened a dozen probes into the national security ramifications of imports of wind turbines, planes, semiconductors, polysilicon, copper, timber and 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.

Trump's administration has been touting tariffs as a significant revenue source. Treasury Secretary Scott Bessent says Washington could collect US$300 billion by the end of the year, more than triple its annual tariff revenue in recent years.

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 European Union, and the United Kingdom include provisions that cap tariffs for specific products such as autos, semiconductors and pharmaceuticals, which means the new higher national security tariffs likely will not raise them above agreed rates.

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 Pharmaceutical Research and Manufacturers of America opposed new drug tariffs, saying earlier this year that 53 per cent by value of the US$85.6 billion in ingredients used in medicines consumed in the US was manufactured in the US, with the remainder from Europe and other US allies.

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 US. A study released in January said imports of those larger vehicles from Mexico have tripled since 2019.

Trump in August had promised to impose new furniture tariffs, saying it would 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.

The US imported about US$25.5 billion in furniture in 2024, up 7 per cent over 2023, with about 60 per cent of those imports coming from Vietnam and China, according to Furniture Today, a trade publication.

INFLATION FEARS

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.

Tariffs could also affect Chrysler-parent Stellantis which produces heavy-duty Ram trucks and commercial vans in Mexico. Sweden's Volvo Group is building a US$700 million heavy-truck factory in Monterrey, Mexico, due to start operations in 2026.

Mexico is home to 14 manufacturers and assemblers of buses, trucks, and tractor trucks, and two manufacturers of engines, according to the US International Trade Administration.

The country is also the leading global exporter of tractor trucks, 95 per cent of which are destined for the United States.

Mexico opposed new tariffs, telling the Commerce Department in May that all Mexican trucks exported to the United States have on average 50 per cent US content, including diesel engines.

Last year, the United States imported almost US$128 billion in heavy vehicle parts from Mexico, accounting for approximately 28 per cent of total US imports, Mexico said.

The Japanese Automobile Manufacturers Association also opposed new tariffs, saying Japanese companies have cut exports to the United States as they have boosted US production of medium- and heavy-duty trucks.