Copper and Pharma sectors hit by new U.S. tariffs

U.S. President Donald Trump has announced a 50% tariff on copper imports and proposed raising pharmaceutical tariffs up to 200% within a year. These measures are part of a broader strategy targeting key sectors like semiconductors, critical minerals, and medicines. The tariffs will take effect from August 1, 2025, with no extensions beyond the deadline.

India, which exports both copper and pharmaceuticals to the U.S., may see limited impact on copper due to strong domestic demand. However, its pharmaceutical sector is at greater risk, given that 40% of India’s drug exports go to the U.S., its largest pharma market.

The U.S. President Donald Trump has announced a 50% tariff on copper imports, expanding his administration’s aggressive trade policies that previously targeted steel and aluminium. He also stated that tariffs on pharmaceutical imports could rise as high as 200% within a year. These measures are part of a wider tariff strategy targeting key strategic sectors such as semiconductors, critical minerals, and pharmaceuticals. The announcement sets a firm implementation deadline of August 1, 2025, with no extensions to be granted beyond that date.

In February, President Trump initiated a Section 232 investigation into copper imports, invoking a law that allows the president to impose tariffs on national security grounds. The move paves the way for steep duties on copper imports, potentially reshaping global trade in the metal.

Copper plays a vital role in the production of electronics, automobiles, and industrial machinery. Imposing tariffs could raise manufacturing costs across these sectors, ultimately making consumer goods more expensive for Americans.

The countries most likely to be impacted by the proposed tariffs are Chile, Canada, and Mexico—the top exporters of refined copper, copper alloys, and copper products to the U.S. in 2024, according to U.S. Census Bureau data. Together, these nations supplied a significant portion of the US$17 billion worth of copper imported by the U.S. last year. Chile alone exported US$6 billion worth of copper to the American market, making it the largest foreign supplier.

In response to the proposed action, Chile, Canada, and Peru—three of the biggest copper exporters to the U.S.—have urged the administration to exempt their shipments from the tariffs, arguing that their exports pose no threat to U.S. national security. All three countries have free trade agreements with the United States.

Meanwhile, markets responded swiftly to the tariff announcement. Copper prices surged, with New York copper futures rising as much as 15%, hitting a record high of US$ 5.68 per pound. The announcement has injected fresh uncertainty into global copper markets, as traders brace for potential disruptions in supply and pricing.

These developments hold particular significance for India. In FY 2024–25, India exported US$2 billion worth of copper and copper products globally, with the U.S. accounting for US$360 million—17% of the total—making it India’s third-largest copper export destination after Saudi Arabia (26%) and China (18%).

Despite the steep tariff, the impact on India may be limited. Strong domestic demand—driven by the manufacturing, energy, and infrastructure sectors—is expected to absorb any shortfall caused by reduced U.S. demand.

Alongside the copper tariff, President Trump signaled forthcoming tariffs on imported pharmaceuticals and semiconductors, warning that drug tariffs could rise to 200% following a grace period of a grace period of around a year to a year and a half. He justified the delay, saying it would give pharmaceutical companies time to adjust before the tariffs are fully implemented.

The Indian pharmaceutical sector is especially vulnerable, as the U.S. is its largest export destination for pharmaceutical products. In FY25, India’s pharma exports to the U.S. rose to US$9.8 billion—a 21% increase from US$8.1 billion the previous year—now accounting for 40% of India’s total pharmaceutical exports.

In 2024, the U.S. imported pharmaceutical products worth US$212 billion, making it the country’s fifth-largest import category. The top suppliers were:

• Ireland – US$ 50 billion
  • Switzerland – US$ 19 billion
  • Germany – US$ 17 billion
  • Singapore – US$ 15 billion
  • India – US$ 12 billion

While the U.S. relies on India and China for affordable generic medicines, brand-name drugs under patent are mostly manufactured in the U.S. or the European Union. According to the Center on Health Policy at Brookings, generics account for 92% of all prescriptions filled at U.S. retail and mail-order pharmacies. The U.S. also relies heavily on China for active pharmaceutical ingredients (APIs).

President Trump argues that boosting domestic drug production is essential to reducing dependence on foreign suppliers. However, a 200% tariff could severely impact the affordability and competitiveness of Indian generics, which play a critical role in keeping healthcare costs low in the U.S. (India’s total pharmaceutical exports hit a record US$30 billion in FY25.)

India is currently negotiating a mini-trade deal with the U.S., expected to address all sector-specific tariffs. If the deal is finalized before the August 1 deadline, the proposed tariffs are unlikely to significantly affect Indian exports.

President Trump made these announcements during a Cabinet meeting at the White House, hinting at broader plans to impose trade restrictions across strategic sectors, further limiting U.S. dependence on foreign imports.

Reinforcing his confrontational stance, President Trump reiterated his threat to impose a 10% tariff on imports from BRICS nations, dismissing the bloc as “not a serious grouping,” even while acknowledging that it challenges the dominance of the U.S. dollar. “If they want to challenge the dollar, that’s fine—but they’ll have to pay tariffs,” he declared.