Hours after saying he plans to use tariff revenues to aid distressed farmers in the U.S., President Trump announced late Thursday that he is raising tariffs on pharmaceuticals, heavy trucks and some types of furniture as of October 1.
Writing on his social media platform, Trump said he is imposing a 100% tariff on pharmaceutical imports starting on the first of the month. There is a significant loophole, though: The tariff will be waived for any company that is actively building new facilities within the U.S. at that time.
Trump also announced that he is imposing a 25% tariff on heavy truck imports, so that “our Great Large Truck Company Manufacturers, such as Peterbilt, Kenworth, Freightliner, Mack Trucks ... will be protected from the onslaught of outside interruptions.” Some specific categories of home goods will also see new import taxes, including kitchen cabinets (50%) and upholstered furniture (30%).
As Politico’s Ari Hawkins reports, those categories of goods have been under investigation by the Commerce Department under Section 232 of the Trade Expansion Act of 1962, which empowers the Commerce secretary to recommend tariffs or quotas on products that are deemed to be a threat to national security because they harm or threaten domestic industries. The Commerce Department is reportedly investigating a wide variety of product types, and Section 232 has already been used by Trump to impose new tariffs on steel, aluminum, copper and vehicles.
Higher prices ahead? The pharmaceutical industry warned that a 100% tariff can only drive drug prices higher.
“Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures,” Alex Schriver, a spokesman for Pharmaceutical Research and Manufacturers of America, known as PhRMA, said in a statement. “Medicines have historically been exempt from tariffs because they raise costs and could lead to shortages.”
Truck and furniture prices will likely rise, as well. “There will be more upward price pressure from tariffs, especially on the ones manufactured in Mexico,” Kenny Vieth, a truck-market analyst, told The Wall Street Journal.
Help for farmers: Many U.S farmers are suffering from the international blowback to Trump’s aggressive use of tariffs, and earlier Thursday the president said he plans to use tariff revenues to assist them as they struggle with weaker exports.
“We’re going to take some of that tariff money that we made, we’re going to give it to our farmers who are, for a little while, going to be hurt until it kicks in, the tariffs kick in to their benefit,” Trump said at the White House. “So we’re going to make sure that our farmers are in great shape because we’re taking in a lot of money.”
Trump said that the details of the bailout plan are still being discussed in coordination with Agriculture Secretary Brooke Rollins. Speaking to reporters in Missouri, Rollins said the aid could be delivered “perhaps in the next couple of weeks.” She also said that about $2 billion remaining in the $10 billion Emergency Commodity Assistance Program, which was provided by Congress to aid farmers suffering losses in 2024, could be released “within the week.”
China not buying: One of the most pressing problems for American farmers is the fact that China has stopped buying some of their most widely produced crops. As The New York Times’s Kevin Draper detailed Friday, soybeans were the largest U.S. export to China last year, with the Asian giant paying $12.6 billion for 52% of all U.S. soybean exports. But China stopped buying U.S. soybeans in May, amid Trump’s tariff blitz, and as farmers harvest their crop this fall, there is growing concern that their biggest customer is now looking elsewhere.
In response to Trump’s punitive tariffs on virtually all Chinese imports, China has imposed its own tariffs on U.S. agricultural goods, making them uncompetitive. To make up for the loss of U.S. imports, China has turned to other global producers, including Brazil and Argentina.
Overall, total U.S. soybean exports are down 23% so far this year compared to a year ago. Farmers have hoped that a comprehensive trade agreement with China would provide relief, but so far negotiators have been unable to agree on anything beyond some general principles, leaving many high tariffs in place.
Calls for aid: Lawmakers from farm states, many of them Republicans, are complaining about the effects of Trump’s trade policy, and some are worried about potential political blowback in the midterm elections.
Republican Sen. Chuck Grassley of Iowa said on social media that farmers are upset in particular that Argentina is selling more soybeans to China, even as the U.S. pledged to provide a $20 billion backstop to support the Argentine economy.
Although the details have yet to be ironed out, the aid program will likely be sizeable. In 2018, the U.S. provided $28 billion to farmers suffering from the effects of a trade war with China during the first Trump administration.