WASHINGTON, Sept 26 — United States (US) President Donald Trump has unveiled a fresh round of punishing tariffs on a broad range of imported goods, including 100 per cent duties on branded drugs and 25 per cent levies on heavy-duty trucks, set to come into force next week.
The latest salvo, which Trump said was to protect the US manufacturing industry and national security, follows sweeping duties on trading partners of up to 50 per cent and other targeted levies on imported products like steel.
The barrage has cast a pall over global growth and paralysed business decision-making around the world, while the US Federal Reserve has said it is also contributing to higher consumer prices in the country.
Trump's latest announcements did not mention whether the new levies would stack on top of existing national tariffs. But recently struck trade deals with Japan, the European Union (EU), and the United Kingdom include provisions that cap tariffs for specific products like pharmaceuticals.
Tokyo said it was still analysing the potential impact of the new measures, which Canberra called "unfair" and "unjustified".
Trump also followed through on a pledge to "bring back" the US' furniture business, saying he would start charging a 50 per cent tariff on imported kitchen cabinets and bathroom vanities and a 30 per cent tariff on upholstered furniture. All the new duties take effect from October 1.
"The reason for this is the large scale 'FLOODING' of these products into the United States by other outside Countries," he said on the Truth Social social media platform on Thursday.
Stocks of pharmaceutical companies across Asia fell as investors reacted to the news, with Australia's CSL hitting a six-year low, Japan's Sumitomo Pharma tumbling more than three per cent, and pharmaceutical indices in Hong Kong and India down more than one per cent.
An index tracking Chinese-listed furniture makers also dropped around one per cent.
The new actions are seen as part of the Trump administration's shift to better-established legal authorities for its tariff actions, given the risks associated with a case before the Supreme Court on the legality of his sweeping global tariffs.
Trump added that the new 100 per cent tariff on any branded or patented pharmaceutical product will apply to all imports unless the company has already broken ground on building a manufacturing plant in the US.
The Pharmaceutical Research and Manufacturers of America, an industry group, said companies "continue to announce hundreds of billions in new US investments. Tariffs risk those plans."
The Trump administration has opened a dozen probes into the national security ramifications of imports of wind turbines, aeroplanes, semiconductors, polysilicon, copper, timber and lumber, and critical minerals to form the basis of new tariffs.
Earlier this week, Trump announced new probes into personal protective equipment, medical items, robotics and industrial machinery. He previously imposed national security tariffs on steel and aluminium and derivatives, light-duty autos and parts, and copper.
Foreign policy tool
Trump has made the levies a key foreign policy tool, using them to renegotiate trade deals, extract concessions, and exert political pressure on other countries.
His administration has played down the impact on consumer prices and touted tariffs as a significant revenue source, with Treasury Secretary Scott Bessent saying Washington could collect US$300 billion (RM1.26 trillion) by the end of the year.
Some economies that have already struck deals may get a reprieve on the latest duties.
The EU's deal with the US stipulates it will pay a 15 per cent tariff on goods, including pharmaceuticals. On Friday, Tokyo's trade negotiator Ryosei Akazawa said that Japan has an agreement that its tariff rates will not exceed others, including the EU.
He declined to comment directly on the new measures, adding that Tokyo is still assessing how they related to their existing deal.
In Australia, Health Minister Mark Butler told the press the government was working to understand the implications of the new "unfair, unjustified tariffs after 20 years of free trade."
Earlier this year, the US pharmaceutical trade group noted that over half of the US$85.6 billion (RM361.3 billion) in ingredients used in medicines consumed in the US are manufactured in the country itself, with the remainder from Europe and other US allies.
When it comes to furniture, imports to the US hit US$25.5 billion (RM107.6 billion) in 2024, up seven per cent from the year prior. About 60 per cent of those imports came from Vietnam and China, according to trade publication Furniture Today.
"Many of our members were shocked when we heard the news. I think the decision on the additional tariff is unfair,” said the Wood and Handicraft Association of Dong Nai province's Nguyen Thi Thu Hoai, whose organisation is one of Vietnam's largest furniture clusters.
In August, Trump had promised to impose new furniture tariffs, saying it "will bring the Furniture Business back" to North Carolina, South Carolina, and Michigan.
Furniture and wood products manufacturing employment in the US has halved since 2000 to around 340,000 today, according to government statistics.
Inflation pressure
Higher tariffs on commercial vehicles could put pressure on transportation costs just as Trump has vowed to reduce inflation, especially on consumer goods like groceries.
He said the new heavy-duty truck tariffs were to protect manufacturers from "unfair outside competition" and said the move would benefit companies like Paccar-owned Peterbilt and Kenworth, and Daimler Truck-owned Freightliner.
The US Chamber of Commerce earlier urged the department not to impose new truck tariffs, noting the top five import sources are Mexico, Canada, Japan, Germany, and Finland, "all of which are allies or close partners of the United States posing no threat to US national security."
Mexico, the largest truck exporter, has opposed new tariffs, telling the Commerce Department in May that all Mexican trucks exported to the United States have, on average, 50 per cent US content, including diesel engines. Chrysler-parent Stellantis is among many companies that produce trucks in Mexico.
Last year, the US imported almost US$128 billion (RM540.2 billion) in heavy vehicle parts from Mexico, accounting for approximately 28 per cent of total US imports in the category.
