Trump Adds Tariffs on Industries Aug. 1 for Double Whammy
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President Donald Trump is readying plans for industry-specific tariffs to kick in alongside his country-by-country duties in two weeks, ramping up his push to reshape the U.S.’s standing in the global trading system by penalizing purchases from abroad.
Administration officials could release details of Trump’s planned 50% duty on copper in the days before they’re set to take effect Aug. 1, according to a person familiar with the matter. That’s the same date so-called reciprocal levies on products from more than a 100 nations are slated to begin.
Trump said July 15 that he is likely to impose tariffs on pharmaceuticals by month’s end, adding that import taxes on semiconductors could come soon as well.
One person familiar with the process said after copper, Trump’s team has discussed making announcements on lumber, chips, critical minerals and drugs in that order, though that cadence has not been finalized and may change.
Those would follow existing duties on steel, aluminum, automobiles and car parts. Once fully implemented, all the sectoral tariffs would cover 30% to 70% of a country’s imports, with much of the rest being hit by country-specific charges, according to a person familiar with the matter.
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The coming wave of U.S. customs taxes will test the calm in financial markets, where investors mostly see Trump’s tough tariff talk as a negotiating ploy prone to delays and de-escalation rather than a prolonged economic headwind.
After investigations that can last about nine months, sectoral duties are being imposed on national security grounds under Section 232 of the Trade Expansion Act. It’s seen as stronger legal footing than the emergency powers Trump used for his country levies, which face court challenges and are being assigned in letters to dozens of trading partners without a deal.
The European Union, Japan, India and others have sought to lower both their reciprocal and sectoral rates. That’s complicating talks, given that U.S. Trade Representative Jamieson Greer handles country-based rates, while Commerce Secretary Howard Lutnick oversees tariffs on industries, according to people familiar with the dynamics.
Here’s where tariffs on each industry stand:
Pharmaceuticals
Trump told reporters July 15 that drug duties would come “probably at the end of the month, and we’re going to start off with a low tariff and give the pharmaceutical companies a year or so to build, and then we’re going to make it a very high tariff.”
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Last month, he said duties on pharmaceuticals could grow as high as 200%. Lutnick said on July 8 that the phase-in period could last up to two years.
A staff draft document has focused levies on between 80 and 90 generic essential medicines, as well as specialty chemicals and precursors, according to a person familiar with it. Those parameters have not been set, however, and the complex nature of the investigation could mean the process could drag out longer, another person said.
Levies on generic medicines that have slim profit margins could hit companies including Teva Pharmaceutical Industries Ltd and Sandoz Group AG. A broader hit that includes brand-name drugs like Ozempic and Keytruda will weigh on the largest manufacturers, such as Eli Lily & Co., Merck & Co. and Pfizer Inc.
Semiconductors
Chips tariffs are on a “similar” timeline to drugs and are “actually less complicated,” Trump said July 15.
Semiconductors were exempted earlier this year from U.S. tariffs on China to give the administration time to develop separate duties. The wide array of exempted products, including inputs for consumer electronics, suggests a very broad consideration of item that could get hit later.
Tech companies, auto manufacturers, boat makers and cryptocurrency enthusiasts are among those that have registered complaints over potential levies, according to public comments on the probe, which started in April.
The charges won’t just hit the chips themselves, but popular products including Apple Inc. and Samsung Electronics Co. smartphones and laptops. It has even brought together rivals Tesla Inc., General Motors Co. and Ford Motor Co., which have all voiced reservations.
Copper
Copper duties are set to include all refined metal as well as semi-finished products used in power grids, data centers and the military, Bloomberg has reported.
(Oliver Bunic/Bloomberg)
The outcome of the investigation that started in March could have an outsize effect on consumer prices, because the metal is in automobiles, homebuilding materials, appliances and many other products. While domestic copper producers competing with foreign suppliers may benefit, U.S. buyers of copper targeted with levies will face higher costs.
Some of the nation’s largest copper miners met July 17 in Washington to discuss how best to message the administration on how to boost the domestic industry while also avoiding punitive tariffs that would harm production.
Lumber
The administration’s lumber investigation is proceeding on a separate track from existing duties on the material from Canada — by far the U.S.’s top source of imports.
The probe is expected to conclude by summer’s end, trade attorney Luke Meisner said during a July 16 panel.
More than a dozen lawmakers have pushed the Commerce Department to implement tariffs of at least 60% on imported wood products, such as cabinets and vanities. Some have urged the administration to tariff cabinets at 100% tariffs.
Republicans from Alabama, North Carolina and Pennsylvania have written letters to the administration that their home-state manufacturers are threatened by cheap foreign imports. Sen. Tommy Tuberville (R-Ala.) said he expects the administration to fulfill their requests.
Critical Minerals
The critical minerals investigation has proved difficult, according to people familiar with the process.
The administration has made several moves to speed domestic mineral extraction and processing in order to reduce dependence on China.
But in the short term, there is little domestic industry to protect with tariffs. Only one U.S.-based company operates a rare-earth mine and processing operation. America remains reliant on imports and tariffs could create supply crunches.
Commercial Aviation
The EU is among the economies negotiating with the administration for exemptions from possible tariffs on commercial aircraft and jet engines. The Commerce Department launched its investigation in May, which remains pending.
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Others
The Commerce Department on July 14 launched investigations into drones and polysilicon, a key material for solar panels, setting the stage for tariffs but likely at a later date. The department also started an investigation into medium- and heavy-duty trucks used in shipping in April that is ongoing.
Written by Joe Deaux, Jenny Leonard, Alicia Diaz and Josh Wingrove
