New sweeping US tariffs target drugs, trucks and furniture

The US has launched another wave of tariffs on its trading partners, this time targeting pharmaceuticals, trucks and furniture.

In one of the most sweeping policies of the new US tariff regime, President Donald Trump announced on 25 September that the country would implement a 100% tariff on imported branded drugs, a 25% tariff on all heavy-duty trucks, 50% tariffs on kitchen and bathroom cabinets and a 30% levy on upholstered furniture.

Trump cited “national security” concerns and the protection of US manufacturing from “unfair outside competition” as the reasons behind the new round of levies, which will all come into effect by 1 October. 

The move comes soon after the US imposed wide-ranging duties of up to 50% and other targeted levies on imported products such as steel and autos.

Exemption for companies building pharma plants

Analysts have warned that the new duties on foreign drugs could send the prices that Americans pay for some medicines skyrocketing, in a country that already has the world’s highest drug prices. The US imported nearly US$213bn in pharmaceuticals last year, according to UN data. 

Calling the massive jump in tariffs on medicines and pharma products “the worst of all worlds”, Nathalie Moll, head of the European Federation of Pharmaceutical Industries and Associations, said it was time for “urgent discussions” with the US. 

“Tariffs increase costs, disrupt supply chains and prevent patients from getting life-saving treatments,” she said in a statement.

Since the announcement, the White House has clarified that the new levy would not apply to companies currently building factories in the US. Several pharmaceutical giants, including AstraZeneca, which is based in the UK, and Swiss companies Roche and Novartis had started building plants in the country before the announcement. 

Others are waiting for clarity on how the tariffs might apply to foreign companies that already have factories in the US.

Protection for US manufacturers

Trade experts warn that the new truck tariff could push up transportation and consumer costs, noting that the sector in the US is heavily reliant on imports. 

Mexico is one of the US’s top sources of medium- and heavy-duty trucks. Last year, the US bought almost US$128bn in heavy vehicle parts from Mexico, accounting for approximately 28% of total US imports, according to Mexican data.

As for the cabinet and furniture levies, the US administration says these are aimed at countering cheaper imports from China and Vietnam, where about 60% of the US$25.5bn in US furniture imports in 2024 came from, according to trade publication Furniture Today.

There are still questions around whether and how this latest round of tariffs will impact the countries and regions that made trade deals with the US over the summer, including Japan and the European Union.