Just moments after announcing sweeping reciprocal tariffs on countries that trade with the United States, US President Donald Trump assured that the pharma sector, particularly, is being looked at as a separate category. While speaking to reporters on Air Force One, Trump said, “Pharma tariffs are going to come in at levels you haven’t really seen before. We are looking at pharmaceuticals as a separate category. We will be announcing that sometime in the near-future and not too distant future. It’s under review right now.”
Earlier on Thursday, the US president imposed a 26 per cent reciprocal tariff on India, claiming that the country imposes a 52 per cent duty on American imports and also engaged in currency manipulation and non-tariff barriers. Trump had exempted imports of pharmaceuticals, energy and certain minerals in his reciprocal tariffs. “Some goods will not be subject to the Reciprocal Tariff. These include: (1) articles subject to 50 USC 1702(b); (2) steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors, and lumber articles; (4) all articles that may become subject to future Section 232 tariffs; (5) bullion; and (6) energy and other certain minerals that are not available in the United States,” the White House had said in a factsheet.
However, experts and analysts had maintained that the announcement needs to be seen with caution. Manish Goel, Founder and MD, Equentis Wealth Advisory Services, said, “The exemption of key Indian exports such as pharmaceuticals, semiconductors, and certain minerals from reciprocal tariffs under Section 232 is a relief. However, these exemptions should be viewed with caution.”
“Policy shifts remain a possibility, particularly in high-value and strategically significant industries, eg. pharmaceuticals deemed essential, may still face scrutiny, with potential tariff adjustments on certain drug categories,” he added.
Indian pharma companies had surged on Thursday after Trump had exempted the sector from any levy. However, its now clear that this is only a temporary exemption.
India imports pharma products worth nearly $800 million from the US, while exports to the country are worth $8.7 billion.
