Trump's 100% Pharmaceutical Tariffs Face EU Resistance Citing Trade Deal Immunity

US President Donald Trump's announcement of significant new tariffs on pharmaceuticals and various imported goods has prompted pushback from several international allies, with the European Union claiming protection for its pharmaceutical industry under a previous trade agreement.

The announcement, made Thursday evening, includes a substantial 100 percent tariff on pharmaceutical products and represents the most aggressive trade policy implemented by the president since his April introduction of "reciprocal" tariffs affecting global trading partners.

Beginning October 1, Trump declared on his Truth Social platform that "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."

In response, the European Union stated on Friday that a July agreement with Washington protects the bloc from tariffs exceeding 15 percent on its pharmaceutical exports.

"This clear all-inclusive 15 percent tariff ceiling for EU exports represents an insurance policy that no higher tariffs will emerge for European economic operators," explained EU trade spokesman Olof Gill.

A European pharmaceutical industry organization cautioned that imposing tariffs on medicines would "create the worst of all worlds." Nathalie Moll, director general of the European Federation of Pharmaceutical Industries and Associations, emphasized on Friday that "Tariffs increase costs, disrupt supply chains and prevent patients from getting life-saving treatments."

Australia, a US ally that exported approximately $1.35 billion worth of pharmaceutical products to the United States in 2024 according to UN Comtrade Database figures, also voiced criticism of Trump's latest decision.

Australian Health Minister Mark Butler stated on Friday that the higher rates were "not in the American consumers' interest... particularly given the degree to which their exporters to Australia benefit from that free trade as well."

In a separate announcement, Trump mentioned implementing a 25 percent tariff on "all 'Heavy (Big) Trucks' made in other parts of the world" to support US manufacturers including "Peterbilt, Kenworth, Freightliner, Mack Trucks and others."

Foreign competitors in the US market, such as Sweden's Volvo and Germany's Daimler (which includes the Freightliner and Western Star brands), saw their shares decline sharply in after-hours European trading, though Volvo recovered when trading resumed.

Trump justified the truck tariffs by citing various reasons, "but above all else, for National Security purposes!" The Trump administration had previously launched a Section 232 investigation into truck imports to "determine the effects on national security," establishing groundwork for Thursday's announcement.

Section 232 is a trade law provision granting the president broad authority to implement tariffs or restrictions on imports deemed threatening to national security. Trump has frequently utilized this provision to initiate investigations and impose tariffs to strengthen US manufacturing and penalize countries he believes are taking advantage of the US.

The president also targeted home renovation materials, announcing "We will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities and associated products," effective October 1, and "Additionally, we will be charging a 30% Tariff on Upholstered Furniture."

According to the United States International Trade Commission, imports in 2022, primarily from Asia, represented 60 percent of all furniture sold in the US, including 86 percent of all wood furniture and 42 percent of all upholstered furniture.

Following the announcement, shares in home furniture retailers Wayfair and Williams Sonoma, which rely heavily on imported goods, experienced significant declines in after-hours trading.

The extensive tariff announcements have reignited concerns about inflation in the US economy, the world's largest.

Trump continues pursuing his mission to rebuild American manufacturing through protectionist policies that represent a complete reversal of traditional US approaches to maintaining an open, import-dependent economy.

His administration has already established a baseline 10 percent tariff on all countries, with higher individualized rates for nations whose exports to the US significantly exceed their imports.

Trump has also employed emergency powers to impose additional tariffs on trade agreement partners Canada and Mexico, as well as China, citing concerns regarding fentanyl trafficking and illegal immigration.

It remains unclear how these new tariffs, scheduled to take effect next week, will integrate with the existing measures.