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(qlmbusinessnews.com . Sat 27th Sep, 2025) London, UK —
US Pharmaceutical Sector Faces 100% Tariffs: Exploring the Implications for International Trade
US President Donald Trump has declared an array of new tariffs, focusing notably on a 100% tax on the import of branded or patented pharmaceuticals from 1 October, pending exceptions for companies committing to construct facilities within the US.
In addition to pharmaceuticals, Washington will implement a 25% tax on the import of heavy-duty lorries and 50% taxes on kitchen and bathroom cabinetry, as announced by the president in his campaign to target specific industrial sectors.
Trump justified these measures on Truth Social, his preferred platform, as a response to the “massive influx” of these products into the United States from abroad, emphasizing the necessity of safeguarding American manufacturing jobs.
Despite pleas from American businesses to refrain from imposing additional tariffs, Trump's recent declarations have stirred controversy.
Nevertheless, Neil Shearing, Capital Economics' Chief Economist, suggests the pharmaceutical tariff might not be as impactful as it seems at first glance, citing exemptions for generic medications and companies establishing production in the US.
“The world's major pharmaceutical producers often have existing operations in the US or plans in place to establish production there,” he noted.
The European Federation of Pharmaceutical Industries and Associations has urged immediate conversations to avert any adverse effects on patients in both the EU and the US, stemming from Trump's tariff proposals.
Conversely, European officials have reassured that pharmaceutical exports to the US will not be subject to tariffs exceeding 15%, per an agreement crafted earlier this year between the US and the EU.
The United Kingdom, having exported over $6bn (£4.5bn) worth of pharmaceutical goods to the US last year, as reported by the United Nations, voiced concern regarding the new tariffs but indicated ongoing negotiations with the US.
Significant British pharmaceutical firms like GlaxoSmithKline and AstraZeneca, both with existing US operations, have announced considerable investment plans in the States, potentially mitigating the tariff impact.
William Bain from the British Chambers of Commerce expressed confidence that such substantial US investments by UK pharmaceutical companies should shield them from the impending duties.
Amid these developments, investment shifts from the UK have been reported, driven by uncertain investment climates and Trump's policies. Jane Sydenham of Rathbones attributes this trend to the strategic necessity for firms to adapt to US-centric investments due to the new tariffs.
Trump also highlighted the tariffs on heavy trucks and certain furniture as measures to protect American manufacturers from international competition, with implications for companies and consumers alike.
Ikea, a major player in the furniture industry, has acknowledged the challenging business environment created by these tariffs, reflecting broader concerns within the international trading community about the impact of Trump's trade policies.
The introduction of these tariffs marks a continuation of Trump's aggressive trade stance, with previous taxes levied on steel, aluminium, and automotive imports stirring debate about the balance between protecting domestic industries and avoiding consumer price escalations.
These tariff decisions, while favouring domestic production, have raised concerns regarding their implications for global trade relations and the international economic landscape.
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