US President Donald Trump announced on Thursday new tariffs of up to 100% on medicines and also affecting trucks and furniture produced outside the United States.
Starting October 1, "we will impose a 100% tax on any branded or patented pharmaceutical product unless a company BUILDS its pharmaceutical factory in America," the Republican billionaire wrote on his Truth Social platform.
While the definition of these drugs "remains unclear," points out Michael Wan, an economist at the Japanese bank MUFG in Singapore, "we assume that this will not include generic drugs shipped from countries like India, which could therefore be spared from these announcements."
The EU also wants to be spared. The trade agreement reached this summer between the EU and the United States protects European medicines from any new customs surcharges, a Commission spokesperson assured on Friday.
This agreement provides that most European exports, including medicines, cannot be taxed above 15%.
"This maximum level of customs duties guarantees that no additional duties will be applied," said Commission spokesperson for trade issues Olof Gill, noting that the EU was "the only trading partner to have achieved such a result with the United States."
The European Federation of Pharmaceutical Industries (Efpia) said that the introduction of new American customs duties on medicines "would create the worst possible situation."
In a separate post, Trump also announced Thursday tariffs of $251,000 on "all heavy-duty trucks manufactured in other parts of the world." He said the measure would support U.S. truck manufacturers such as Peterbilt, Kenworth, Freightliner, and Mack Trucks.
Among the foreign companies competing with these manufacturers in the American market are Sweden's Volvo and Germany's Daimler.
Shares of both companies fell sharply after the close of trading on European stock exchanges on Thursday evening.
The president explained that these customs duties on heavy goods vehicles were motivated by "many reasons, but above all, for national security purposes!"
In the spring, his administration had already announced that it was launching an investigation to determine whether imports of foreign trucks constituted a threat to "national security."
– Fears of inflation –
The real estate mogul also plans to impose customs duties on many pieces of furniture.
"We will apply a 50% tax on all kitchen furniture, bathroom sinks and related products," starting October 1, and "a 30% tax on upholstered furniture," he wrote.
According to the United States International Trade Commission, in 2022, imports, primarily from Asia, accounted for 60% of all furniture sold, including 86% of all wood furniture and 42% of all upholstered furniture.
Shares of retailers Wayfair and Williams Sonoma, which rely on these imported products, fell at the close following the announcement.
This tariff offensive revives fears of inflation in the United States, the world's largest economy.
Donald Trump has made it his mission to revive manufacturing through protectionist policies, marking a complete reversal of the US policy of maintaining an open economy.
His administration imposed a basic tariff of 10% on all countries, with much higher rates for a number of countries whose exports to the United States exceed their imports.
The president has notably imposed surcharges on the country's main trading partners such as Canada, Mexico, the European Union and China, with which talks are still ongoing.
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