Key Points
- President Trump announced a new wave of tariffs on imported goods.
- Key targets include a 100% tariff on branded pharmaceuticals and a 25% tariff on heavy-duty trucks.
- Furniture is also being hit with tariffs of 30% to 50%. The new duties are set to take effect on October 1.
- The move reignites trade tensions after a relatively calm summer.
President Donald Trump on Thursday announced a sweeping new round of import tariffs, including a massive 100% duty on branded drugs and a 25% levy on heavy-duty trucks. The move reignites global trade uncertainty after a relatively quiet summer.
Trump stated that the new tariffs are intended to protect American manufacturing and national security. Still, they are sure to send another shockwave through a global economy already struggling with supply chain problems and high costs.
The new tariffs include:
- 100% on branded drugs from producers that haven’t started building manufacturing plants in the U.S.
- 25% on heavy-duty trucks.
- 50% on imported kitchen cabinets and bathroom vanities.
- 30% on upholstered furniture.
All the new duties are set to take effect on October 1. The announcement follows a period of calm after Trump struck trade deals with key partners, such as Japan and the EU, over the summer. However, it remains unclear how these new tariffs will impact the existing agreements.
While Asian stocks fell on the news, U.S. and European markets seemed to be shrugging it off for now. “Until the U.S. economy shows more signs of stress from the trade war, investors seem content to keep calm and carry on,” BMO Economics said in a note.
Many major drugmakers, a key target of the new tariffs, have already been preparing for this, announcing significant investments in U.S. manufacturing to avoid the potential impact. However, other industries, such as furniture and trucking, were caught off guard and are now facing significant uncertainty.
