President Trump Threatens To Impose 50% Import Tariff on Copper; 200% on Pharmaceuticals

09th July 2025: The US President, in a fresh announcement in the ongoing tariff negotiations with almost all the major economies, has indicated steep tariffs on two of the largest export commodities from India to the US: a 50 per cent tariff on all copper imports and signalled a potential 200 per cent tariff on pharmaceutical products. The US President has already made an announcement related to copper imports, following the implementation of similar duties on steel and aluminium.

However, the pharmaceutical tariff will be applied within the next 18 months, during which he has urged the American pharmaceutical companies to shift their bases back to the US.

Around 12:00 PM, the Nifty Metal Index steeply dropped by 1.72% (9,353.60), in what could be considered a response to the announcements.

Copper and Pharma in the Crosshairs

The copper tariff marks the fourth major import duty hike by Trump during his second term. During a Cabinet meeting, the president declared, “Today we’re doing copper,” although no official implementation timeline was given.

Even more concerning is the 200 per cent duty Trump proposed on pharmaceutical imports, which would come into effect after a transition period of 12 to 18 months. Both copper and pharma had previously been excluded from Trump’s ‘Liberation Day’ tariff list, but those exemptions now appear to be at risk.

Impact on India’s Pharmaceutical Sector

India’s pharmaceutical industry is particularly vulnerable. The United States is India’s largest export destination for drugs, accounting for 36.6 percent — valued at $9.8 billion between April 2024 and February 2025.

A 200 per cent tariff could significantly undercut India’s competitive pricing advantage. While stock market reactions have been muted so far, the long-term implications may include reduced demand, disrupted supply chains, and higher drug costs for American consumers. Indian pharma companies are exploring new markets, but diversification is unlikely before 2026 due to the time required to establish alternative trade routes.

Copper Exports Also Under Pressure

India exported $2.1 billion worth of copper in 2024, with over 15 per cent destined for the US market. A 50 per cent import levy could erode price competitiveness for Indian copper in the US, favouring domestic or third-country suppliers.

A Possible Trade Truce?

The tariff announcements come just as India and the US are negotiating a “mini-trade deal” that may offer sector-specific tariff exemptions. The goal is to finalize the deal by August 1. If successful, the agreement could cushion the blow of these proposed levies.

Domestic and Global Reactions

In the US, the pharmaceutical lobby group PhRMA has raised concerns, warning that such tariffs may lead to cost inflation, reduced investments, and drug shortages. Domestic drug giants, such as Eli Lilly, Johnson & Johnson, and AbbVie, are expanding their operations, but the sector remains cautious due to concerns about instability.

Trump’s unpredictable trade tactics — often referred to as “TACO” moves — add another layer of uncertainty to the evolving trade landscape. Whether the pharma tariffs are implemented in full remains to be seen.

Conclusion

With the US election cycle heating up, Trump’s tariff threats appear aimed at shoring up domestic industry sentiment. However, the implications for India could be significant, especially for two sectors central to its export economy. All eyes are now on the mini-trade deal negotiations, which may decide whether diplomacy can temper protectionism.

Disclaimer:  At HDFC SKY, we take utmost care and due diligence in curating and presenting news and market-related content. However, inadvertent errors or omissions may occasionally occur.

If you have any concerns, questions, or wish to point out any discrepancies in our content, please feel free to write to us at content@hdfcsec.com.

Please note that the information shared is intended solely for informational purposes and does not make any investment recommendations