Washington (AFP) – US President Donald Trump announced Thursday punishing tariffs on pharmaceuticals, big-rig trucks, home renovation fixtures, and furniture, reviving his global trade war. The late evening announcement is the harshest trade policy by the president since last April’s shock unveiling of reciprocal tariffs on virtually every US trading partner across the globe.
Starting October 1, “we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” the Republican wrote on his Truth Social platform. In a separate post, he wrote of a 25 percent tariff on “all ‘Heavy (Big) Trucks’ made in other parts of the world” to support US manufacturers such as “Peterbilt, Kenworth, Freightliner, Mack Trucks and others.” Foreign companies that compete with these manufacturers in the US market include Sweden’s Volvo and Germany’s Daimler, which includes brands Freightliner and Western Star. Shares in both companies were sharply lower in after-hours trading in Europe.
Trump said the truck tariffs were “for many reasons, but above all else, for National Security purposes!” Earlier this year, the Trump administration launched a so-called Section 232 probe into imports of trucks to “determine the effects of national security,” setting the stage for Thursday’s announcement. Section 232 is a trade law provision that gives the president broad authority to impose tariffs or other restrictions on imports when they’re deemed a threat to national security. Trump has made extensive use of Section 232 to initiate investigations and impose tariffs on imported goods as part of his efforts to bolster US manufacturing and punish countries that he says are taking advantage of the US.
The real estate tycoon also targeted home renovation materials, writing, “We will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities and associated products,” as of October 1. “Additionally, we will be charging a 30% Tariff on Upholstered Furniture,” he added. According to the United States International Trade Commission, in 2022 imports, mainly from Asia, represented 60 percent of all furniture sold, including 86 percent of all wood furniture and 42 percent of all upholstered furniture. Shares in home furniture retailers Wayfair and Williams Sonoma, which depend on these imported goods, tumbled in after-hours trading following the announcement.
The tariff onslaught will rekindle fears over inflation in the US economy, the world’s biggest. Trump is on a mission to rebuild manufacturing through protectionist policies that mark a complete reversal of modern US policy to maintain an open and import-dependent economy. His administration has imposed a baseline 10 percent tariff on all countries, with higher individualized rates on nations where exports to the US far exceed imports. The president has also used emergency powers to impose extra tariffs on trade deal partners Canada and Mexico, as well as on China, citing concerns over fentanyl trafficking and illegal immigration. It was not yet clear how these new tariffs that kick in next week would factor into the existing measures.
© 2024 AFP
