US President Donald Trump yesterday unveiled sweeping new import tariffs, including 100 per cent duties on branded drugs and 25pc levies on heavy-duty trucks, triggering fresh trade uncertainty after a period of comparative calm.
The latest salvo, which Trump said was to protect the US manufacturing industry and national security, follows wide-ranging duties on trading partners of up to 50pc and other targeted levies on imported products such as steel.
It’s the latest upheaval for global businesses already struggling with snarled supply chains, soaring costs and consumer uncertainty caused by Trump’s trade war. The barrage has cast a pall over global growth, while the Federal Reserve has said it is also contributing to higher US consumer prices.
The new actions are seen as part of the Trump administration’s shift to better-established legal authorities for its trade actions, given the risks associated with a case before the Supreme Court on the legality of his global tariffs.
The flurry of new announcements follows a period of relative calm after Trump reached trade deals with some key trading partners over the summer. They could reignite uncertainty that clouded the business outlook during the spring when new import levy announcements were an almost-weekly occurrence.
“If there is a particular sector where you see a new announcement, of course, that’s going to set you back,” Federal Reserve Bank of Richmond President Tom Barkin said on Bloomberg TV. “There’re sectors with a lot more clarity, and sectors with a lot less clarity.”
Mixed US equity futures indicated that investors were largely shrugging off Trump’s latest tariff announcement, BMO Economics said in a note.
“Until the US economy shows more signs of stress from the trade war, investors seem content to keep calm and carry on,” BMO said.
Trump’s announcement on Truth Social did not say whether the new levies would be on top of existing national tariffs. Recent trade deals with Japan, the EU, and Britain include provisions that cap tariffs for specific products like pharmaceuticals.
A non-binding preliminary trade deal between the EU and the US agreed to limit tariffs to 15pc. Trump hasn’t yet signed an executive order confirming the agreement.
The European Commission said yesterday the agreement was “clear” that there was an all-inclusive 15pc tariff ceiling.
Claudio Feltrin, chairman of Italian furniture industry association FederlegnoArredo, said he feared the tariffs could trigger a flood of imports from China and other exporters seeking alternative markets.
Japan has an agreement that its tariff rates will not exceed others including the EU, Tokyo’s trade negotiator Ryosei Akazawa said.
Trump said the 100pc tariff on branded drugs would only apply to producers that had not already broken ground on US manufacturing plants.
Many drugmakers have announced multibillion-dollar investments in the US, and Switzerland’s Roche underlined yesterday that one of its US units recently started work on a new facility.
Trump had long threatened higher tariffs on drugmakers and Ireland, where mainly American-owned pharmaceutical factories employ about 2pc of the workforce, has frontloaded much of its exports to the US in anticipation.
Trump also followed through on a pledge to “bring back” America’s furniture business, saying he would start charging a 50pc tariff on imported kitchen cabinets and bathroom vanities and a 30pc tariff on upholstered furniture.
All the new duties take effect from October 1.
About 60pc of the $25.5bn in US furniture imports in 2024 came from Vietnam and China, according to Furniture Today, a trade publication.
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.
Trump said the new heavy-duty truck tariffs would benefit companies such as Paccar-owned Peterbilt and Kenworth and Freightliner.
Shares of German truck makers Daimler Truck and Traton fell on news of the levies.
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