On September 26, 2025, U.S. President Donald Trump announced a new wave of tariffs on key imports, including 100% duties on branded pharmaceutical products, 25% tariffs on heavy-duty trucks, and 50% tariffs on kitchen cabinets, effective from October 1, 2025.
This follows a series of investigations initiated by the U.S. under Section 232 of the Trade Expansion Act of 1962, which empowers President Trump to impose tariffs citing national security reasons.
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These measures mark a continuation of Trump’s “America First” economic policy, with significant ramifications for global trade, investor confidence, and bilateral ties—particularly with close trading partners like India.
This announcement comes amid ongoing concerns about the weaponization of trade policy, wherein national security rhetoric is increasingly used to justify protectionist economic actions.
Justifications and Industry Response
Rebuilding domestic manufacturing capacity.
Countering “unfair” foreign competition.
Addressing national security vulnerabilities, particularly in pharmaceutical supply chains.
Appealing to core electoral constituencies in manufacturing-heavy states.
Industry Pushback
The Pharmaceutical Research and Manufacturers of America opposed the new drug tariffs, noting that earlier this year, 53% of the $85.6 billion worth of medicine ingredients used in the U.S. were produced domestically, while the rest came from Europe and other allied nations.
The Pharmaceutical Research and Manufacturers of America warned of supply chain disruptions and increased drug prices.
The U.S. Chamber of Commerce expressed concern over tariffs on trucks, noting key suppliers like Mexico, Canada, Japan, Germany, and Finland are long-standing allies and pose no national security risk.
Implications for Global Trade
Trade Uncertainty and Market Volatility: The unpredictability of tariff announcements paralyzes business decisions, disrupts supply chains, and deters long-term investment, particularly in industries like pharmaceuticals that require stable regulatory frameworks.
Weakening of Multilateral Trade Norms: The frequent invocation of national security exceptions dilutes the authority of the World Trade Organization (WTO), undermining the global rules-based trading order.
Strategic Realignment Among Trade Partners: Nations affected by the tariffs may increasingly pivot toward regional trade blocs (e.g., RCEP, EU-Japan FTA), reducing their reliance on U.S. trade relations.
Implications for India
Pharmaceutical Sector Exposure: India is a key supplier of generic and branded pharmaceuticals to the U.S. market.
While generics may escape immediate tariff hikes, the wider industry sentiment and investment risks could affect Indian pharmaceutical exports and pricing competitiveness.
Challenge to Atmanirbhar Bharat: While India’s Atmanirbhar Bharat Abhiyan and PLI (Production-Linked Incentive) schemes aim to boost domestic pharmaceutical production, dependence on exports to the U.S. makes the sector vulnerable.
Disruption in India-U.S. Trade Talks: India and the U.S. have long negotiated trade deals on tariff rationalization, particularly in agriculture, medical devices, and digital services. These unilateral actions by the U.S. may:
Complicate ongoing FTA discussions
Prompt India to reassess reciprocal tariff measures
