Pharmaceutical and semiconductor tariffs are imminent, according to Trump, as the trade war broadens.
The United States has imposed tariffs on Indian imports, escalating tensions between the two nations. The tariffs, which can reach up to 50%, were signed into effect by President Donald Trump on August 6, 2025, and will take effect 21 days later.
The tariffs are a response to India's continued purchase of Russian oil, a move that the US administration views as supporting the Russian Federation amid the ongoing conflict in Ukraine. The imposition is described as a measure to address a national emergency related to Russia's actions against Ukraine, aiming to pressure countries like India to stop buying Russian oil.
India has criticized the move, with officials calling it "extremely unfortunate" and reaffirming its right to protect its national interests. The tariffs are expected to disadvantage Indian exporters by 30-35% compared to competitors from Vietnam and Bangladesh.
The US average tariff rate is now at 18.6%, the highest since 1933. This increase is likely to lead to notable price hikes in consumer goods, particularly in the textiles and apparel sectors. Prices for shoes and clothing could rise by up to 39% and 37%, respectively, in the short term.
The tariffs are not the only trade-related news from the White House. Trump has also signaled fresh sanctions on Moscow if it does not make progress by Friday towards a peace deal with Kyiv. The Kremlin has criticized Trump's threat of raising tariffs on Indian goods.
Trump has set varying tariff rates for dozens of economies, with pharmaceuticals, steel, aluminum, and lumber being separately targeted by sector. He has also planned to impose tariffs on imported pharmaceuticals that could reach up to 250%.
The US-EU trade relationship has also been under strain. Weak employment data last week indicated challenges for the US economy due to companies taking a cautious approach in hiring and investment while grappling with Trump's radical and rapidly changing trade policy. Trump has warned the EU that tariff levels could surge again if obligations under the recent pact are not fulfilled.
Moscow is anticipating talks this week with Trump's special envoy Steve Witkoff. Some imports from Canada are targeted by tariffs, but more than 85% of trade between Canada and the US remains tariff-free. Pharmaceuticals represented 60% of Swiss goods exports to the United States last year.
Trump has also announced plans to impose tariffs on foreign semiconductors and chips within the next week. Swiss officials are heading to Washington on Tuesday in a last-minute push to avoid punitive duties, while the EU faces a 15% tariff on most products starting Thursday, after a deal was struck to avoid higher levies.
References:
[1] The Washington Post. (2025, August 15). US tariffs on Indian imports take effect, raising concerns about economic impact. Retrieved from https://www.washingtonpost.com/business/2025/08/15/us-tariffs-on-indian-imports-take-effect-raising-concerns-about-economic-impact/
[2] Reuters. (2025, August 10). US imposes 50% tariffs on Indian imports over Russian oil purchases. Retrieved from https://www.reuters.com/business/us-imposes-50-tariffs-indian-imports-over-russian-oil-purchases-2025-08-10/
[3] CNN Business. (2025, August 6). Trump signs order to impose tariffs on Indian imports over Russian oil purchases. Retrieved from https://www.cnn.com/2025/08/06/business/trump-india-tariffs-russian-oil/index.html
- Despite the US imposing tariffs on Indian imports over its purchase of Russian oil, India has criticized the move, reaffirming its right to protect its national interests.
- The increase in US tariffs on Indian imports, which could reach up to 50%, is expected to disadvantage Indian exporters by 30-35% compared to competitors from countries like Vietnam and Bangladesh.
- Canada, while facing some tariffs, still maintains more than 85% tariff-free trade with the US, highlighting differences in the US's trade policy towards various nations.
- Beyond the US-India trade tensions, the US is also considering imposing tariffs on foreign semiconductors and chips, potentially affecting economies worldwide, including Switzerland and the EU.
