Donald Trump has revealed a fresh round of trade tariffs on several key sectors, with the most punitive rate likely to affect UK businesses.
The US president used his Truth Social account last night to confirm that a new 100% tariff would apply to any branded or patented pharmaceutical product from 1 October.
He said that to escape the clutches of that duty, a company must have already broken ground on a new US factory.
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From the same date, a 50% tariff would be applied to all imported kitchen and bathroom cabinets, while upholstered furniture faced a 30% rate.
A 25% tariff faced shipments of heavy trucks.
The president did not confirm whether the duties would be lower for nations which have agreed trade deals with his administration, including the UK and European Union.
Each faces a blanket 10% and 15% rate on their exports, respectively, at the moment.
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The UK’s deal talked of intent to “promptly negotiate significantly preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients”.
No subsequent agreement has been announced.
It leaves open the possibility that the new duties will be applied in line with other, higher, sectoral tariffs that are currently in place above the base rate, such as that for steel.
“The reason for this is the large scale “FLOODING” of these products into the United States by other outside countries,” Trump said in his post.
The lack of detail around the application of the planned new tariff rules means further uncertainty for companies potentially affected.
Shares in pharmaceutical firms listed in Asia fell sharply overnight as industry bodies rushed to seek clarification on the new rules.
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Those for AstraZeneca (AZ) were down 1.4% at the open in Europe to top the losers on the FTSE 100.
GSK and Hikma Pharmaceuticals’ stocks were also lower.
AZ – the UK’s most valuable listed company – already has vast US manufacturing and research operations.
In July, as the threat of tariffs loomed large, it revealed plans for a further $50bn investment by 2030.
US figures show the country imported $233bn of drugs and medicines from abroad last year, with the UK accounting for around $6.5bn of that sum.
A 100% tariff rate, even on some of those shipments, risks ramping up the cost of US healthcare, according to critics of the president’s approach.
By imposing the 100% tariff rate, Mr Trump wants to bring prices down through encouraging domestic production and secure hundreds of billions of dollars for taxpayers through tariffs at the same time.
US industry groups lined up to oppose the planned measures.
The Pharmaceutical Research and Manufacturers of America said non-US companies were continuing to announce hundreds of billions of dollars in new US investments. “Tariffs risk those plans,” it said.
The US Chamber of Commerce urged a U-turn on any truck tariffs.
It said the five nations to be worst affected – Mexico, Canada, Japan, Germany and Finland – were “allies or close partners of the United States posing no threat to US national security.”
