Trump announces steep new tariffs, EU claims pharmaceutical immunity

AFP | Washington

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US President Donald Trump’s announcement of steep new tariffs on medicines and other goods drew pushback from some allies yesterday, with the EU claiming immunity for its pharmaceutical industry under an earlier trade deal.

The announcement late on Thursday evening, which included a 100% levy on pharmaceuticals, is the harshest trade policy by the president since last April’s shock unveiling of “reciprocal” tariffs on virtually every US trading partner across the globe.

Starting October 1, “we will be imposing a 100% 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.

The European Union said yesterday a July deal with Washington shielded the bloc from tariffs higher than 15% on its drug exports.

“This clear all-inclusive 15% tariff ceiling for EU exports represents an insurance policy that no higher tariffs will emerge for European economic operators,” EU trade spokes man Olof Gill said.

A European pharmaceutical industry group also warned that tariffs on medicines would “create the worst of all worlds.

” “Tariffs increase costs, disrupt supply chains and prevent patients from getting life-saving treatments,” Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations, said on Friday.

Trump’s latest move was also criticized by US ally Australia, which exported pharmaceutical products worth an estimated $1.35 billion to the United States in 2024, according to the UN’s Comtrade Database.

Australian Health Minister Mark Butler said on Friday that the higher rates were “not in the American consumers’ interest... particularly given the degree to which their exporters to Australia benefit from that free trade as well.”

Big rigs

In a separate post, Trump wrote of a 25% 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.”

Foreign companies that compete with these manufacturers in the US market include Sweden’s Volvo and Germany’s Daimler, which includes the Freightliner and Western Star brands.

Shares in both companies were sharply lower in after-hours trading in Europe, although Volvo recovered when trading resumed.

Trump said the truck tariffs were “for many reasons, but above all else, for National Security purposes!”

The Trump administration launched a so-called Section 232 probe this year into imports of trucks to “determine the effects of national security,” setting the stage for Thursday’s announcement.

The real-estate tycoon also targeted home renovation materials, writing “We will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities and associated products,” from October 1.

“Additionally, we will be charging a 30% Tariff on Upholstered Furniture,” he added.

According to the United States International Trade Commission, imports in 2022, mainly from Asia, represented 60 percent of all furniture sold, including 86 percent of all wood furniture and 42% of all upholstered furniture.

Shares in home furniture retailers Wayfair and Williams Sonoma, which depend on these imported goods, tumbled in after-hours trading following the announcement.