Trump teases new tariffs on drugs and chips
High-stakes negotiations intensify as global leaders react to looming US trade penalties
US President Donald Trump indicated yesterday that new tariffs on imported pharmaceuticals and semiconductors might be announced as early as next week as part of his ongoing efforts to reshape global trade.
These comments were made during an interview with CNBC, occurring just days before another set of tariff increases is set to impact several economies later this week.
The proposed tariff measures have prompted significant diplomatic activity, with Swiss leaders travelling to Washington yesterday, August 5, to negotiate against punitive duties.
Despite these efforts, Trump seems determined to intensify his trade confrontations. He said that forthcoming tariffs on imported pharmaceuticals could eventually reach 250%, highlighting his intention to encourage domestic production. Additionally, he said that new tariffs on foreign semiconductors would be announced soon.
In April, Trump imposed a 10% tariff on nearly all trading partners, though certain sectors were initially excluded. The proposed 39% tariff on Swiss imports, excluding pharmaceuticals, has prompted Swiss officials to negotiate. Pharmaceuticals account for 60% of Swiss exports to the US, making the potential tariff increase a critical issue in bilateral discussions.
Besides the focus on pharmaceuticals and semiconductors, Trump has already implemented a 50% duty on steel and aluminium imports, along with lower tariffs on automobiles and parts, Bangkok Post reported.
In the CNBC interview, Trump also indicated plans to substantially increase tariffs on Indian imports within 24 hours, citing India’s purchase of Russian oil as a primary factor. This move is part of a broader strategy to apply pressure on Moscow, which is currently engaged in military actions in Ukraine.
Economic indicators, such as weak employment data from last week, suggest challenges for the US economy. Businesses are adopting a cautious stance on hiring and investment due to Trump’s unpredictable tariff policies.
While the tariffs are intended to bolster US exporters and promote domestic manufacturing, there are concerns about inflation and other potential economic repercussions in the US.
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