US to Impose New Tariffs of Up to 100% on Imports from October

On 25 September, US President Donald Trump announced via his Verified Social platform that the United States will implement a new round of significant tariffs on a wide array of imported goods, effective 1 October.

The tariffs target several key product categories. According to the announcement, imports of kitchen cabinets, bathroom vanities, and related building materials will face a 50% duty. A 30% tariff will be applied to imported furniture, while a 100% tariff is set for patented and branded pharmaceuticals. Additionally, a 25% levy will be imposed on all imported heavy-duty trucks.

President Trump stated that the measures are a response to the influx of foreign products which, he argued, harms domestic manufacturers. The tariffs are being imposed for 'national security and other reasons', specifically mentioning furniture, cabinetry, and heavy-duty trucks. He added that the 100% tariff on pharmaceuticals would not apply to drugs from companies that have already begun construction on manufacturing facilities within the United States. This move is the latest in a series of policies from the Trump administration this year aimed at the pharmaceutical sector, with stated goals of lowering drug prices and bringing supply chains back to the US.

Recent data suggests existing tariff policies are already affecting consumer prices. Figures from the US Bureau of Labour Statistics show a 4.7% year-on-year increase in furniture prices in the US market for August 2025.

The announcement has drawn criticism from business groups. The US Chamber of Commerce had previously urged the government against new tariffs on heavy-duty trucks, noting that the top sources for such imports-Mexico, Canada, Japan, Germany, and Finland—are US allies and do not constitute a national security threat.

Analysis indicates the direct impact of the pharmaceutical tariffs on Chinese drug manufacturers is likely to be limited. Although Chinese innovative drug companies have seen growth in overseas licensing deals, China's overall pharmaceutical exports are comparatively low. In 2024, China ranked tenth globally for pharmaceutical trade volume, accounting for only 17.8% of the US volume, and its exports ranked sixteenth worldwide. The new tariffs primarily target brand-name drugs, of which China exports very few to the US.

According to the US Food and Drug Administration (FDA), brand-name drugs are those sold under a proprietary, trademarked name. Data shows that while they represent only 10% of prescriptions dispensed in the US, they account for 86.9% of prescription drug spending. A significant majority, 73%, of these drugs originate from European countries like Ireland, Germany, and Switzerland.

Industry professionals note that leading Chinese pharmaceutical products exported to the US, such as specific cancer therapies, operate on a localised "US production, US sales" model, insulating them from import tariffs. Furthermore, when multinational pharmaceutical companies license innovative drugs from China, they typically acquire full manufacturing and commercialisation rights, with subsequent production unlikely to be affected by these tariffs.

Regarding generic drugs, which fill 90% of US prescriptions, the possibility of tariffs is considered low. Approximately 60% of these drugs are manufactured in India (47.2%) or China (13.0%), with only 10.5% produced domestically. Industry executives suggest tariffs on generics would likely lead to a sharp increase in US drug prices.

In contrast to China's position, Europe's pharmaceutical industry appears directly exposed. The US accounted for 38.2% of the EU's pharmaceutical exports to non-EU regions in 2024. Ireland, a core pharmaceutical hub for Europe, sends over 60% of its pharma exports to the US market, hosting manufacturing facilities for many major American companies.

President Trump's statement outlined an exemption for companies currently building pharmaceutical plants in the US, suggesting the tariff could be avoided by establishing domestic manufacturing operations. This policy appears to be having an effect; under pressure to shift production, some companies have already increased US investment. For instance, Merck & Co. recently announced it would terminate early-stage drug research projects in the UK and cancel a £1 billion plan for a London R&D centre.