Trump Announces New Tariffs on Drugs, Trucks, and Cabinets
US President Donald Trump has announced a new wave of tariffs targeting pharmaceuticals, heavy-duty trucks, and kitchen/bathroom cabinets. The move includes a 100% levy on branded or patented drug imports, a 25% import tax on trucks, and 50% levies on cabinets, effective October 1st. These tariffs aim to protect US manufacturers from what Trump describes as a "large scale 'FLOODING'" of these products into the United States.
Pharmaceutical Tariff Details and Exemptions
The pharmaceutical tariff includes a significant caveat: exemptions will be granted to generic drugs and companies building factories in the US. This has led some, like Neil Shearing, chief economist at Capital Economics, to suggest the announcement is "not quite as big a move as it appears at first sight." He noted that many large pharmaceutical companies already have or are planning to establish production in the United States.
International Reactions and Concerns
The European Federation of Pharmaceutical Industries and Associations has called for "urgent discussions" to prevent harm to patients in the EU and the US. European officials have stated that pharmaceutical exports are shielded from tariffs exceeding 15% under an existing agreement. The UK, which exported over $6 billion in pharmaceutical products to the US last year, has expressed concerns. A UK government spokesperson stated they are "actively engaging with the US" on this issue.
UK Pharmaceutical Companies' Response and Investment
Several major UK pharmaceutical companies, including GlaxoSmithKline and AstraZeneca, already have a significant presence in the US. GlaxoSmithKline recently pledged a $30 billion investment in US research and manufacturing, while AstraZeneca plans a $50 billion investment by 2030. William Bain of the British Chambers of Commerce believes these investments should protect them from new duties.
Investment Shifts and Underlying Factors
While some pharmaceutical companies have recently pulled investments from the UK, citing a poor environment, Jane Sydenham of Rathbones suggests the US focus is a key driver. She stated that the investment shifts are "really more about Donald Trump's agenda and the uncertainty that's creating for these companies and where they might need to invest to handle the tariff proposals."
| Affected Sector | Tariff Rate | Effective Date |
|---|---|---|
| Branded/Patented Pharmaceuticals | 100% (with exemptions) | October 1st |
| Heavy-Duty Trucks | 25% | Announced |
| Kitchen/Bathroom Cabinets | 50% | Announced |
