Trump Administration Adjusts Metal Tariffs, Imposes 100% Duty on Pharmaceuticals Amid Affordability Fears

New U.S. Tariff Policies Target Metal and Pharmaceutical Imports

The United States has introduced new tariff policies that significantly impact the importation of metal products and pharmaceuticals. These changes, announced by the Trump administration, are designed to address what the government perceives as threats to national security posed by foreign imports.

Increased Tariffs on Metals

The U.S. government will impose a 50 percent tariff on steel, aluminum, and copper imports. This is based on the “full value” paid by U.S. customers rather than the “artificially low” foreign prices. Additionally, adjustments have been made to tariffs on derivative metal products. For items containing less than 15 percent steel, aluminum, or copper by weight, no additional sectoral duties will be imposed. However, a 25 percent tariff will apply to products exceeding this threshold.

These changes are set to take effect at 12:01 a.m. on Monday (Washington time). The White House stated that the modifications aim to strengthen the metal tariffs to more effectively address the national security threat from such imports. The proclamation defines how tariffs are assessed, ensuring they reflect the full value of imported steel, aluminum, and copper products rather than artificially low foreign prices.

Simplification of Duty Calculations

During a press briefing, a senior U.S. official explained that the adjustments concerning derivative metal products are meant to simplify the duty calculation process. Currently, the U.S. assesses metal duties based on the value of the metal content in each product, which is a complex process. Under the new adjustments, a straightforward 25 percent tariff will be applied to products containing a “substantial” amount of steel, aluminum, or copper. Products with less than 15 percent of these materials will not be subject to sectoral tariffs.

This change is expected to affect Korean companies exporting washing machines, refrigerators, and other products. The official noted that instead of complex calculations, a 25 percent tariff on a washing machine would be applied, given that these products are made of large amounts of steel.

Introduction of 100 Percent Tariff on Pharmaceuticals

In addition to the metal tariffs, the Trump administration signed a separate document to impose a 100 percent tariff on patented pharmaceuticals not produced in the U.S. and without an MFN pricing agreement with the U.S. However, South Korea, Japan, Switzerland, and the European Union are exempt from this tariff due to their bilateral trade deals with the U.S.

For companies that commit to building a pharmaceutical plant in the U.S., the tariff will be reduced to 20 percent. If a company builds a plant in the U.S. with an MFN agreement, the tariff will be zero. Certain big companies will have 120 days to decide whether to announce “reshoring” plans before the 100 percent tariff takes effect, while smaller companies will have 180 days.

Impact on Affordability

When asked about concerns regarding the potential impact of metal derivative tariffs on affordability for American citizens, the official stated there would be “no impact on affordability whatsoever.” They emphasized that these changes would not affect the price of goods on the shelf.

Legal Basis for Tariffs

Both the metal and pharmaceutical tariffs are based on Section 232 of the Trade Expansion Act of 1962. This law allows the president to adjust imports into the U.S. when he determines they threaten to impair national security.