Trump's pharma tariffs likely to fuel trade tensions
The U.S. President, Donald Trump, announced that he will soon impose tariffs on the importation of pharmaceutical products. "Once we do that, they’re going to come rushing back into our country, because we’re the big market," Trump said.
"We're gonna tariff our pharmaceuticals... we're going to be announcing very shortly a major tariff on pharmaceuticals," stated Donald Trump during Tuesday's gala, where funds were being raised for the Republican Party. "Once we do that, they’re going to come rushing back into our country, because we’re the big market. The advantage we have over everybody is that we’re the big market," said Trump, as quoted by Bloomberg. However, the President did not provide any details on what such tariffs would look like or when they would be announced and implemented.
As Bloomberg reminds us, Trump has long mentioned that the production of pharmaceuticals has been moved from the U.S. to other countries. He has repeatedly suggested that he would introduce tariffs to encourage manufacturers to set up plants in the States.
The U.S. is escalating the trade war
The agency also notes that the U.S. has already imposed a 25% tariff on the importation of steel, aluminium, and cars. Additionally, last week a general 10% tariff rate on imports from most countries around the world was implemented, and on Wednesday, 9th April, specific rates were introduced - different for each country. For the European Union, the tariff is 20%. On Wednesday, the EU decided to impose tariffs of up to 25% on American goods in retaliation for the tariffs imposed by the U.S. on steel and aluminium.
Bloomberg explains that these general tariffs do not apply to products that already had a 25% rate imposed and those for which Trump will soon announce new tariffs—including medicines, timber, and semiconductors.
China finds itself in an exceptional situation, with the U.S. having already imposed a total of 104% tariffs. In retaliation, Beijing imposed tariffs on Washington, with the total rate already at 84%. "I can tell you that this escalation is a loser for them," U.S. Treasury Secretary Scott Bessent said in an interview with Fox News. He added that China is "the worst offender in the international trading system."
Donald Trump's decisions are causing significant emotions in the markets. Stock exchanges in many countries are recording substantial declines.
