US President Donald Trump announces 100% tariff on imports of branded or patented pharmaceuticals

Lallalit Srijandorn FXStreet

US President Donald Trump said that the United States (US) will impose a 100% tariff on imports of branded or patented pharmaceutical products from October 1, unless a pharmaceutical company is building a manufacturing plant in the US, Reuters reported on Thursday.

Additionally, Trump will be imposing a 50% Tariff on all Kitchen Cabinets, Bathroom Vanities, and associated products, as well as a 25% tariff on trucks, starting from October 1.

Market reaction

At the time of writing, the US Dollar Index (DXY) is trading 0.65% higher on the day to trade at 98.50.

Tariffs FAQs

What are tariffs?

Tariffs are customs duties levied on certain merchandise imports or a category of products. Tariffs are designed to help local producers and manufacturers be more competitive in the market by providing a price advantage over similar goods that can be imported. Tariffs are widely used as tools of protectionism, along with trade barriers and import quotas.

What is the difference between taxes and tariffs?

Although tariffs and taxes both generate government revenue to fund public goods and services, they have several distinctions. Tariffs are prepaid at the port of entry, while taxes are paid at the time of purchase. Taxes are imposed on individual taxpayers and businesses, while tariffs are paid by importers.

Are tariffs good or bad?

There are two schools of thought among economists regarding the usage of tariffs. While some argue that tariffs are necessary to protect domestic industries and address trade imbalances, others see them as a harmful tool that could potentially drive prices higher over the long term and lead to a damaging trade war by encouraging tit-for-tat tariffs.

What is US President Donald Trump’s tariff plan?

During the run-up to the presidential election in November 2024, Donald Trump made it clear that he intends to use tariffs to support the US economy and American producers. In 2024, Mexico, China and Canada accounted for 42% of total US imports. In this period, Mexico stood out as the top exporter with $466.6 billion, according to the US Census Bureau. Hence, Trump wants to focus on these three nations when imposing tariffs. He also plans to use the revenue generated through tariffs to lower personal income taxes.

Author

Lallalit Srijandorn

FXStreet

Lallalit Srijandorn is a Parisian at heart. She has lived in France since 2019 and now becomes a digital entrepreneur based in Paris and Bangkok.

AUD/USD consolidates above 0.7200 after hot Chinese CPI data

AUD/USD is extending its consolidative price action above 0.7200 during the Asian session on Wednesday, uninspired by hot Chinese CPI and PPI data. Meanwhile, rising RBA rate-hike bets act as a tailwind for the Aussie amid Yen-inspired US Dollar weakness. Traders await the release of US inflation figures later in the week for fresh impetus.

USD/JPY rises above 153.50 on renewed USD strength

USD/JPY shakes off the bearish pressure and trades above 153.50 in the American session on Wednesday. The US Dollar (USD) stages a rebound following the US Treasury buyback announcement and helps the pair gain traction. Nevertheless, solid Japanese data reinforce expectations that the BoJ will continue normalising monetary policy, lending further support to the Yen and capping the pair's upside for now.

Gold regains balance above $4,400

Gold rebounds on Wednesday, snapping a three-day losing streak and reclaiming the are beyond the key $4,400 mark per troy ounce. The precious metal’s bounce comes amid further selling pressure on the US Dollar and steady uncertainty on the geopolitical front.

XRP extends recovery as ETF inflows, futures interest stabilize

Ripple (XRP) ticks higher, trading at $1.42 on Wednesday while building on a recently confirmed support range between $1.30 and $1.35. The token also sits above major moving averages, reinforcing the bullish outlook. However, upside could remain capped unless the psychological barriers at $1.50 and $1.70 are cleared, paving the way for an extended recovery above $2.00.

Venezuela’s 65-billion-barrel Oil deal could reshape America’s inflation fight

The United States (US) has secured unprecedented access to part of Venezuela’s vast Oil reserves. The timing is particularly significant as the war with Iran is disrupting Middle Eastern supplies, keeping energy prices elevated and reviving concerns about inflation.