Trump Tariffs Updates: US President likely to announce Pharma tariffs. Will it imapact India?

US President Donald Trump's pressed pause on his tariffs for most nations on Wednesday, but raised the tax rate on Chinese imports to 125%. It was seemingly an attempt to narrow what had been an unprecedented trade war between the US and most of the world to a showdown between the US and China. The S&P 500 stock index jumped nearly 7% after the announcement.

At 01:32 p.m. the Dow Jones Industrial Average .DJI rose 2,305.81 points, or 6.13%, to 39,959.81, the S&P 500 .SPX gained 334.86 points, or 6.72%, to 5,317.63 and the Nasdaq Composite .IXIC gained 1,254.95 points, or 8.22%, to 16,522.86.

China, on April 9, announced that they are going to once again raise the tariffs on all goods imported from the United States to 84 per cent, compared to the previous levels of 34 per cent, effective April 10, reported the news agency CNBC. 

Later, the European Union also decided to launch its first countermeasures against Trump's tariffs next week. The EU will put in place duties mostly of 25% on a range of US imports from next Tuesday in response specifically to the US metals tariffs.

This comes after the White House increased the total tariffs on China to 104% on April 8.

Trump, on April 8, also announced that the United States would soon announce a “major tariff” on pharmaceutical imports into the Western nation.

“We're gonna tariff our pharmaceuticals... we're going to be announcing very shortly a major tariff on pharmaceuticals,” Donald Trump said at the gathering on April 8. The pharma sector was exempted from the US tariffs announced last week, which will come into effect today, April 9. 

Will Pharma Tariffs Impact India?

Trump's proposed "major" tariff on pharmaceutical imports is intended to incentivise drug companies to relocate their operations to the United States, leveraging the country's large market size. 

The proposed tariffs could significantly impact India, which is the world's largest supplier of generic drugs and has a substantial share in the US market. 

Indian pharmaceutical companies, such as Biocon, Lupin, and Sun Pharmaceutical, could face financial challenges as they derive a significant portion of their revenue from exports to the US.

How Could Pharma Tariffs Impact US Residents?

American consumers, already facing expensive healthcare, may face increased prices for generic drugs, which could rise by up to $0.12 per pill, translating to an additional annual cost of about $42 per person. 

More expensive drugs, such as those for cancer treatment, could see even higher price increases.

Trump Tariffs

US President Donald Trump on Sunday, April 6, threatened China that if they do not roll back the additional 34% tariffs imposed on the Western nation, then they will announce a 50% fresh set of tariffs on all Chinese imports to the US.

China failing to comply with the directives, the White House on Tuesday, April 8, announced that they imposed an additional 50 per cent tariff on China, bringing up the total tariff rate to 104 per cent.

“It was a mistake for China to retaliate. When America is punched, He punches back harder. That's why there will be 104 per cent tariffs going into effect on China tonight... If China reaches out to make a deal, he will be incredibly gracious,” said Karoline Leavitt, the press secretary of the White House on April 8. 

This US-China clashes on tariff rates started after Donald Trump imposed his ‘reciprocal tariffs’ on other nations in the world, including China, on April 2, Donald Trump's ‘Liberation Day’. The Asian nation then retaliated to Trump's move by announcing additional tariffs on all US imports on April 4.

This exchange between the two of the most powerful nations in the world sparked a sense of fear among global market investors which eventually led to a global stock market crash as people rushed to safe-haven assets with fears of an upcoming economic recession.

Apart from China, Trump also imposed a ‘baseline’ tariff of 10 per cent on nations, which came into effect on Saturday, April 5, after the US stock market crash on Friday.

In his speech, the US President also imposed tariffs on 180 countries last week, which will come into effect today, April 9. However, on April 8, Trump, in his Truth Social post, also mentioned that the US government is working with nations who want to negotiate bespoke trade deals amid an ongoing large-scale tariff war between the world nations.

“We're managing a massive amount of requests for negotiations…,” said President Donald Trump. 

Global Markets

Global markets on Wednesday dropped again after a temporary respite on Tuesday on the news that the White House has imposed a total of 104% tariffs on China after the Asian nation failed to remove the additional 34% tariff on US goods import.

On the Asian markets front, Japan's Nikkei 225 index lost 3.93% or more than 1,200 points, closing at 31,714.03, compared to 33,012.58 points at the previous market close.

Asia Dow Index also lost 2.12%, currently trading at 3,651.66 points as of 7:10 a.m (EDT), compared to 3,730.62 points at the previous close.

However, in contrast, the Hong Kong-based Hang Seng Index closed 0.68% higher at 20,264.49 points, compared to 20,127.68 points at the previous stock market close.

European markets crashed after opening on Wednesday, with the UK-based FTSE 100 currently trading 2.46% lower at 7,717.55 points as of 11:57 a.m. (BST), compared to 7,910.53 points in the previous close.

The German DAX index is also down 2.45% and is trading at 19,785.41 points, compared to 20,280.26 points at the previous trading close.

As of 4:43 p.m. (IST), the Dow Jones Futures are down 615.60 points or 1.64% at 37,030 points, ahead of the Wall Street open on Wednesday, April 9.

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