U.S. President Donald Trump's proposed tariffs on imported copper and pharmaceutical goods have sparked strong reactions internationally and domestically. Concerns are rising about inflation, supply chain instability, and escalating trade tensions.
According to the U.S. Trade Representative’s office, the tariffs include a 25% levy on refined copper products and a 15% duty on imported generic pharmaceuticals and active pharmaceutical ingredients (APIs). The measures are scheduled to take effect on August 1, 2025.
Barclays estimates that these tariffs could add 0.2 to 0.4 percentage points to the US Consumer Price Index over 12 months. The Federal Reserve, which recently paused interest rate hikes due to stabilizing core inflation, may now need to reassess its policy. Former Fed Vice Chair Lael Brainard stated that trade policy creates supply-side constraints, which are harder to offset than demand-side fluctuations.
Copper prices surged after the announcement. On the London Metal Exchange (LME), copper rose 3.9% within 24 hours, reaching $9,850 per tonne. The Tokyo Commodity Exchange reported similar price increases with higher trading volumes in East Asia.
The European Union quickly condemned the tariff proposal as "unilateral and deeply destabilizing," especially regarding pharmaceuticals. In 2024, the EU exported over €120 billion worth of pharmaceutical products to the United States, with Ireland, Germany, and Belgium as major exporters.
China’s Ministry of Commerce called the proposal "short-sighted" and warned of countermeasures targeting high-value American exports like medical devices and aircraft parts. India's Ministry of External Affairs expressed deep concern that the tariff risks undermining essential drug supplies during a fragile global health era.
Trade law experts suggest the tariffs may not meet WTO requirements without a national security justification. The EU, India, Japan, South Korea, and others may initiate formal disputes via the WTO's Dispute Settlement Body. This situation resembles the 2018 steel and aluminum tariffs, which the WTO later struck down and had unclear effects on domestic production and job creation.
US-based drugmakers fear increased input costs and supply disruptions. The Pharmaceutical Research and Manufacturers of America (PhRMA) noted that 72% of APIs used in US drug production are imported, mainly from India and China. Companies may have to absorb costs or pass them on to consumers. IQVIA data shows that generic drugs account for 90% of US prescriptions but only 20% of total drug spending, indicating price sensitivity.
The International Energy Agency estimates that the world needs nearly double the current copper supply by 2030 to meet clean energy targets. Copper tariffs could raise costs for solar panels, electric vehicles, and grid upgrades, potentially slowing the U.S. energy transition and weakening its clean tech competitiveness.
The S&P 500 fell by 0.7%, with industrial and healthcare sectors experiencing the largest losses. The Nasdaq Biotechnology Index dropped 1.5%, while copper mining companies like Freeport-McMoRan and BHP saw share prices increase due to expected supply constraints and higher margins. Investor sentiment remains fragile, with asset managers citing policy unpredictability as a key risk.
Trump’s tariff strategy is a test for the resilience of globalization. As copper and medicine become geopolitical tools, the world faces a new economic order defined by sovereignty rather than efficiency.
Dhanishtha De is a trainee journalist at Cult Current. The views expressed in the article are
her ownand do not necessarily reflect the official stance of Cult Current.