Trump’s Tariff Blitz: Key Details

Pharmaceuticals : 100% tariff on branded/patented drugs, with exemptions for firms “breaking ground” on US plants.

Heavy Trucks : 25% tariff on imported trucks, affecting fleets sourcing internationally.

Kitchen Cabinets & Bathroom Vanities : 50% tariff, aimed at curbing import surges.

Upholstered Furniture: 30% tariff, impacting the US housing and retail sectors.

Implemented under Section 232 of the Trade Expansion Act of 1962, the measures cite “national security” concerns, offering stronger legal protection than previous IEEPA-based tariffs.

India-US Pharmaceutical Trade at Stake

Bilateral Trade FY25: $132.2 billion, with India holding a $40.8 billion trade surplus.

Pharma Exports to US: $8.7–10.5 billion, supplying 47% of US pharmaceutical needs.

India accounts for 20% of global generics and fills 4 out of 10 US prescriptions, generating $219 billion in healthcare savings in 2022.

While the tariffs primarily target branded drugs, India’s generics-based exports provide some short-term insulation. Pharmexcil Chairman Namit Joshi confirmed: “It does not apply to generic medicines.”

Strategic Implications for Indian Pharma

PLI Scheme Vulnerability : India’s Production-Linked Incentive (PLI) program focuses on high-value patented drugs and complex generics. The tariffs threaten efforts to climb the pharmaceutical value chain.

US Manufacturing Investments : Exemptions for companies building US facilities have prompted Indian firms like Sun Pharma, Cipla, Aurobindo Pharma, and Zydus Lifesciences to expand their American footprint.

Long-Term Risk : Without US-based operations, India’s push into branded drugs and novel therapeutics faces barriers

Trump’s prior tariff authority under IEEPA is currently under Supreme Court review, with potential overreach being questioned. In contrast, tariffs implemented under Section 232 benefit from stronger legal protection, citing “national security” concerns, which makes them more resilient against legal challenges. The US is also conducting ongoing Section 232 investigations into sectors such as semiconductors, commercial aircraft, critical minerals, and wind turbines, signaling a broader strategic approach to safeguarding domestic industries while using trade policy as a lever in global supply chains.

The immediate market reaction to the September 25, 2025, tariff announcements has been noticeable. Indian pharmaceutical stocks fell 2.6% on September 26, with major companies like Sun Pharma, Biocon, Cipla, and Natco among the most affected as investors reassessed potential revenue impacts. Meanwhile, in the US, prior tariffs have already contributed to a 1.3% increase in the Consumer Price Index, eroding household purchasing power and slowing GDP growth by approximately 0.5 percentage points, highlighting the domestic economic risks of such trade measures.

Beyond pharmaceuticals, the tariffs are expected to have broader industry implications. The furniture and cabinet sector will see higher costs for US consumers, affecting housing, construction, and home renovation projects, with living and dining room furniture prices already up 9.5% year-over-year. Similarly, the heavy truck industry faces increased procurement costs for fleets sourcing internationally, which may lead companies to reevaluate supply chains and sourcing strategies.

For Indian companies, strategic responses are crucial to mitigating trade risks. Accelerating US-based manufacturing could help pharmaceutical firms circumvent tariffs while maintaining market access. Simultaneously, diversifying export markets beyond the US would reduce dependency and spread risk. Focusing on complex generics and biosimilars enables companies to capture higher-margin opportunities and move up the value chain, while enhancing cost-efficiency in APIs and bulk drug production ensures India retains its competitive advantage in global pharmaceutical exports.

Final Word

Trump’s October 1 tariff implementation marks a major escalation in trade policy, targeting multiple sectors with immediate disruption potential. While generics remain shielded, Indian pharma ambitions in branded and high-value products face a strategic challenge. Companies must accelerate US investments, diversify markets, and strengthen value-chain efficiency to navigate this evolving trade environment.