U.S. slaps steep 100% tariff on drug imports, raising alarm for Indian pharma industry

US President Donald Trump announced on September 25, 2025, that the United States will impose a 100 per cent tariff on imported pharmaceutical drugs starting October 1. In addition, he announced tariffs of 50 per cent on kitchen cabinets and bathroom vanities, 30 per cent on upholstered furniture, and 25 per cent on heavy trucks. This new move could have major consequences for India, which is one of the largest suppliers of pharmaceutical products to the US.

Trump explained the new tariffs on his social media platform, Truth Social. He stated that the tariffs would not apply to companies that are building new manufacturing plants in the United States, which he defined as either “breaking ground” or “under construction.” However, there is still confusion about how these tariffs would apply to companies that already have factories in the US.

Trump’s announcement is part of his larger focus on tariffs, which he believes will encourage companies to manufacture more products domestically and reduce the US government’s budget deficit. However, experts warn that the tariffs could increase inflation, raise consumer prices, and slow economic growth. Federal Reserve Chair Jerome Powell recently stated that higher costs for goods are already driving inflation and could continue to do so as new tariffs take effect.

In 2024, the United States imported nearly $233 billion worth of pharmaceutical and medicinal products. With the new tariffs, prices for some medicines could double, which may increase healthcare costs, including for government programs like Medicare and Medicaid.

Impact on India’s pharmaceutical exports

The US is the largest market for Indian pharmaceutical companies, especially for affordable generic medicines. In 2024, India exported $3.6 billion (Rs 31,626 crore) worth of pharmaceutical products to the US. In the first half of 2025 alone, exports reached $3.7 billion (Rs 32,505 crore).

Many Indian companies, including Dr. Reddy’s, Sun Pharma, Lupin, and Aurobindo, have benefited from the US market, which relies heavily on lower-cost Indian generics. Although Trump’s tariff mainly targets branded and patented drugs, which are mostly produced by multinational companies, there is uncertainty about whether Indian complex generics and specialty medicines could also be affected.

India’s exports have already faced 50 per cent tariffs in the US in previous years. Trump has also included a 25 per cent “penalty” on continued purchase of Russian oil as part of his broader trade strategy. The new tariffs could make Indian pharmaceutical products less competitive in the US market and affect the revenues of Indian drugmakers.

Analysts fear that the tariffs may force Indian companies to reconsider investments, slow growth in exports, and create challenges for US hospitals and pharmacies that rely on affordable medicines from India. For Indian pharmaceutical companies, the US market accounts for a significant share of their global sales, and any disruption could have ripple effects across the entire industry.

Tariffs on furniture, trucks, and other products

Apart from pharmaceuticals, Trump also imposed tariffs on other products. Foreign manufacturers of kitchen cabinets and bathroom vanities will face a 50 per cent tariff. Trump claimed that these products were flooding the US market and affecting domestic producers. Higher costs could impact homebuilders and buyers, especially at a time when the housing market is already under pressure due to shortages and high mortgage rates.

Additionally, tariffs of 30 per cent on upholstered furniture and 25 per cent on heavy trucks were announced. Trump stated that foreign-made heavy trucks were hurting US truck manufacturers such as Peterbilt, Kenworth, Freightliner, and Mack Trucks. The tariffs aim to protect domestic producers and encourage more US-based manufacturing.

Trump has consistently maintained that tariffs are necessary to force companies to invest in domestic production. He argues that companies should not rely solely on imports and should instead create factories in the US, even if it means paying higher costs initially. However, critics warn that importers will likely pass on the cost of tariffs to consumers and businesses, potentially making everyday goods more expensive.

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The new tariffs highlight the trade tensions between the US and global exporters. For India, the announcement is particularly concerning because the US market represents a large portion of its pharmaceutical exports. Many Indian companies will now have to reevaluate their strategies, potentially considering local production in the US or exploring other international markets to reduce dependency.

Overall, Trump’s new tariffs reflect his continued focus on protecting American industries and boosting domestic manufacturing. While his policies may support some US producers, they also raise questions about global trade relations, pricing, and supply chains. For India, the 100 per cent tariff on pharmaceutical imports could pose challenges for companies that supply essential medicines to the US, affect revenues, and require strategic adjustments to maintain their position in the world’s largest pharmaceutical market.