A year after 'Liberation Day,' Trump sets new drug tariffs, adjusts metals duties

US President Donald Trump ordered 100% tariffs on certain branded pharmaceutical imports and overhauled steel, aluminum and copper duties yesterday (2 April) as his administration sought to move on from the collapse of the broad global tariffs he announced exactly one year ago.

The new tranche of tariffs is aimed partly at rebuilding duties lost when the Supreme Court struck them down in February.

But they drew criticism from some business groups for adding potential new cost pressures at a time when the war on Iran has spiked energy prices for consumers.

In a new proclamation revealing the results of a long-awaited national security investigation into pharmaceutical imports, Trump said foreign manufacturers of patented products must agree to make deals with the US government to cut prescription-drug prices and commit to moving production to the United States.

They must do both to avoid tariffs altogether and will face a 20% tariff if they simply move some manufacturing to the US, according to an administration official.

Those who do neither would face a 100% duty.

The tariffs will not apply to drug imports from all countries.

Branded drug tariffs will be capped at 15% under trade deals with the European Union, Japan, South Korea and Switzerland.

The US and Britain also finalised a separate pharmaceuticals tariff deal that guarantees zero tariffs on British-made pharmaceuticals for at least three years as Britain builds out production in the United States.

An administration official said large pharmaceutical companies would have 120 days to comply before the 100% tariff rates kick in, and smaller producers would have 180 days.

Metals rate reduced

Trump also issued a separate metals tariff proclamation that halved the duty rate to 25% on many derivative products made with steel, aluminum and copper, and dropped them altogether on products with minimal metal content.

The move kept in place the 50% duty on commodity imports of steel, aluminum and copper. But according to the official, the Trump administration will now apply this rate to the US sales price of the metals, not the declared import value, which the official said had often been kept artificially low.

The metals changes are aimed at simplifying an overly complicated tariff regime that gave importers headaches in trying to determine the value of the metal content of thousands of derivative products, from tractor parts to stainless steel sinks and railroad equipment.

Products with minimal metal content of less than 15% by weight, such as a dental floss container with a tiny steel cutter blade, will no longer be subject to these tariffs.

The White House also said it will cut duties on certain metal-intensive industrial and power-grid equipment to 15% from 50% through 2027 to aid a broad industrial and data-center build-out.

The change in the metals tariffs will be effective just after midnight on Monday (30 March), the order said.

Pivot from 'Liberation Day'

The changes came on the one-year anniversary of Trump's "Liberation Day" announcements of "reciprocal tariffs" ranging from 10% to 50% on imports from all trading partners and even some uninhabited islands.

The tariffs under the International Emergency Economic Powers Act kicked off months of retaliation from China, trade negotiations with other countries and court challenges from importers.

The US Supreme Court in February declared the IEEPA-based tariffs illegal, prompting a lower court order for the US Customs and Border Protection agency to devise a plan to refund some $166 billion in tariffs collected over a year.

Jamieson Greer, the US trade representative, yesterday (2 April) defended the IEEPA tariffs as a "reset button" for a broken global trading system and credited the tariffs with driving companies to build new factories in the US and forcing trading partners to grant concessions for US exports.

"The best is yet to come as President Trump's tariff program incentivizes domestic production, raises workers' wages, and reinforces our critical supply chains," Greer said in a statement.

Industry reaction

The US Chamber of Commerce said that a full year of Trump's higher tariffs has already raised prices and added cost pressures for many industries, and warned that the latest announcements could spur further price increases.

"A new, complex tariff scheme on pharmaceuticals will raise healthcare costs for American families," the Chamber's policy chief Neil Bradley said in a statement.

"Changes to metals tariffs will likewise raise prices for consumers and add pressure to manufacturing, construction, and energy — industries that are already reeling from higher input costs and ongoing supply-chain challenges," Bradley added.

But Steel Manufacturers Association president Philip Bell praised the administration for "right-sizing" the metals derivatives list and updating its valuation methodology to ensure that tariffs "remain precisely targeted to support the revitalization of the American steel industry without undermining broader economic goals."