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TWN
Info Service on WTO and Trade Issues (Sep25/21) Geneva, 26 Sep (D. Ravi Kanth) — United States President Donald Trump on 25 September announced another round of allegedly unilateral tariffs on imports, including 100% on patented pharmaceutical products, 50% on kitchen-related items, 30% on upholstered furniture, and 25% on heavy trucks, in what analysts said appears to be a violation of the global trade rules. The continued wave of allegedly unilateral tariffs – starting with the 10% universal tariff, varying levels of reciprocal tariffs, and sectoral tariffs on steel, aluminium, and various other products – appears to have violated the most-favoured-nation (MFN) treatment and the sanctity of scheduled tariff commitments under the GATT. Announcing the latest moves in three separate posts on his social media website Truth Social on 25 September, President Trump said: “Starting October 1st, 2025, 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. “IS BUILDING” will be defined as, “breaking ground” and/or “under construction”.” The latest tariff ultimatum on branded or patented pharmaceutical products says that “there will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!” Many of the largest pharmaceutical companies have already announced new construction in the US in recent months, including Eli Lilly, AstraZeneca, Roche Holding and GSK. According to a report in the Wall Street Journal (WSJ) on 25 September, more than a dozen leading pharmaceutical giants have pledged to invest around $350 billion collectively by the end of this decade on manufacturing, research and development, and other functions in the US. Apparently, nine out of 10 prescriptions in the US are filled with generic drugs, which would not be affected by a tariff on “branded or patented” products, as President Trump told reporters. A few months ago, the Trump administration imposed a 15% tariff on most pharmaceuticals coming from the European Union. Pharmaceutical companies have been fearful of tariffs because many have manufacturing plants in Europe and other regions outside the US. “Most innovative medicines prescribed in America are already made in America,” said Alex Schriver, a spokesperson for the Pharmaceutical Research and Manufacturers of America (PhRMA). “PhRMA companies continue to announce hundreds of billions in new US investments … Tariffs risk those plans because every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures,” he added. In another post on Truth Social on 25 September, President Trump said: “We will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, starting October 1st, 2025.” He continued: “Additionally, we will be charging a 30% Tariff on Upholstered Furniture.” He justified the tariffs on these items by suggesting that “the reason for this is the large scale “FLOODING” of these products into the United States by other outside Countries.” “It is a very unfair practice, but we must protect, for National Security and other reasons, our Manufacturing process,” he declared. Vietnam, China, Mexico, and Malaysia will likely be affected by the latest tariffs on kitchen-related items. President Trump declared that “in order to protect our Great Heavy Truck Manufacturers from unfair outside competition, I will be imposing, as of October 1st, 2025, a 25% Tariff on all “Heavy (Big!) Trucks” made in other parts of the World.” “Therefore,” he said, “our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks, and others, will be protected from the onslaught of outside interruptions.” “We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!” The US has reportedly reaped billions of dollars from the tariffs imposed during the past six months. More tariff revenue is expected to flow into US coffers, which will likely be used for subsidizing the nation’s farmers. According to the WSJ report, “commercial truck manufacturers rely on plants in Mexico to produce heavy-duty trucks for the US market”, while “Germany’s Daimler Truck North America unit assembles some Freightliner- brand trucks in Mexico.” Freightliner is the North American market leader in heavy-duty trucks, with about a 40% share, while Germany’s Traton Group produces International-brand heavy-duty trucks in Mexico. It is unclear whether this new tariff on heavy-duty trucks goes against the US-EU, US-Japan, and US-Korea bilateral free trade agreements. The US Supreme Court agreed this month to hear arguments in November on the Trump administration’s bid to save its sweeping global tariffs, setting the stage for a final ruling on a cornerstone of the President’s economic agenda. The tariffs, which were dealt a string of defeats in the lower courts, are set to remain in place until the case is decided. +
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