We are currently in the midst of Naked Capitalism’s fundraising week, and so far, 93 generous donors have contributed to our mission to tackle corruption and predatory practices, especially in the financial sector. We invite you to join us in this effort by visiting our donation page, where you can find options for giving through check, credit card, debit card, PayPal, Clover, or Wise. You can also read about the reasons behind our fundraiser, our achievements over the past year, and our ongoing goal to enhance our IT infrastructure.
Trump’s Ongoing Tariff Debacle
In recent events, Trump continues to demonstrate his fixation on generating headlines through attention-grabbing but often counterproductive strategies. He still harbors the outdated belief that imposing tariffs will restore America’s manufacturing supremacy. However, much of the manufacturing capacity has already relocated to China, which now faces so much production that it struggles with overcapacity and fierce price competition. As a result, Chinese officials have had to implement measures to regulate this competition. Even if the U.S. were to somehow revitalize its manufacturing base, automation would likely minimize job creation in the newly established factories.
Moreover, several crucial factors have been highlighted by various commentators, including those contributing to this platform, specifically the current lack of skilled workers in the U.S., particularly at the supervisory and factory management levels. In a particularly misguided move, the Trump administration has actively undermined efforts to attract foreign investment for new plants in America, exemplified by the recent ICE raid on Hyundai’s facility in Georgia.
A New Wave of Tariffs
Trump’s latest display of assertiveness involves announcing dramatic new tariffs, reaching an alarming 100% on certain goods:
According to the New York Times:
The president also stated that the U.S. will impose a 50% tariff on imported kitchen cabinets, bathroom vanities, associated products, a 30% tariff on imported furniture, and a 25% tariff on foreign trucks.
It seems to me that the U.S. furniture industry, predominantly situated in North Carolina, largely shifted overseas during the 1990s and early 2000s, leading to most furniture sold in America being imported and often at lower price points.
In essence, this seems to be yet another instance where Trump prioritizes his own political ambitions over the well-being of everyday consumers, pushing the U.S. toward an outdated economic model reminiscent of the late 19th century, complete with inadequate access to reliable medications. Just remember, Trump had previously exempted imported drugs from tariffs as a way to shield consumers from rising prices linked to Indian imports, which had been influenced by India’s decision to continue purchasing oil from Russia.
Moreover, these new tariffs might not be rescinded even if Trump were to lose his case regarding the use of emergency powers to enforce tariffs. He is now trying to leverage different regulatory frameworks. As noted by CNBC:
The Trump administration initiated an investigation under Section 232 regarding pharmaceutical products in April, allowing the Commerce Secretary to scrutinize the effects of imports on national security. This power has been previously employed to impose tariffs on other goods, including cars and aluminum.
If the administration indeed cut corners, it could lead to legal challenges, though it is premature to assess potential outcomes. The Commerce Department appears to be relying on data indicating that the value of pharmaceuticals skyrocketed nearly threefold from 2014 to 2024, to $219 billion. While this figure may seem disproportionate when viewed in conjunction with the overall expenditure increases reported by Statista, questions remain regarding the methods used to collate these data:
Though the overall fallout might be less dire than anticipated, the reality of doubling costs for many necessary drugs is detrimental to patients, driving up expenses for private insurers and government programs like Medicare, Medicaid, and the VA. One wonders if this move is intentionally designed to create financial strain within federally funded healthcare programs, ultimately justifying further budget cuts.
Initial Reactions from the Medical Community
Here are some initial reactions regarding the potential medical consequences:
100% tariff on pharmaceutical products
Estimated to add $200 billion in additional costs. Traditionally, 60-70% of this is passed directly to insurers and patients, which translates to an added healthcare burden of $60-140 billion for Americans in 2026-2028.… pic.twitter.com/JAXo1DMV7q— “Riseyourself” RL Narayanan (@rlnarayanan) September 26, 2025
Additionally, according to CNBC:
Eli Lilly expressed concerns that tariffs would deprive manufacturers of the capital needed for innovation and reshoring investments, as those funds would need to be redirected to offset the impact of the tariffs. This concern was part of a multitude of comments submitted to the Department of Commerce regarding its investigation into the pharmaceutical industry.
Health policy experts have suggested that these tariffs could disrupt existing drug supply chains, leading to increased costs for various treatments and further exacerbating medication shortages plaguing the nation. Drug manufacturers often depend on a global array of production facilities for different manufacturing phases.
Furthermore, a leading pharmaceutical industry association cautioned that medications have historically been exempt from tariffs due to concerns over rising costs and potential shortages:
“PhRMA companies continue to announce hundreds of billions in new US investments thanks to President Trump’s pro-growth tax and regulatory policies,” stated Alex Schriver, senior vice president at the Pharmaceutical Research and Manufacturers of America (PhRMA).
“Tariffs risk those plans because every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures.”
Despite alarms raised by industry insiders, assessing the long-term impact remains challenging due to the ambiguity and conflicting nature of Trump’s various policies. Reports indicate that these new tariffs may supersede existing trade agreements with the EU, UK, and Japan, which prescribe lower tariffs on specific goods. As pointed out by Reuters:
The Trump administration’s trade agreements with Japan, the EU, and the UK involve provisions that cap tariffs on specific products—including autos, semiconductors, and pharmaceuticals—suggesting these new national security tariffs may not exceed agreed rates.
The EU has committed to a tariff rate of 15% on various categories, with similar stipulations existing under agreements with Japan.
However, these developments have not fully alleviated investor concerns. Some pharma stocks, particularly in Japan and Asia, saw declines following Trump’s announcement:
Bloomberg has also noted that many key pharmaceutical players already possess manufacturing facilities in the U.S., which should help them avoid the brunt of these new tariffs. According to analysts from Jefferies:
Trump’s proposal to impose a 100% tariff on branded and patented drug imports drew little anxiety from various investors. Many believe exemptions for companies with existing U.S. manufacturing operations will mitigate any negative impact.
Numerous large pharmaceutical firms already have U.S. production facilities or are actively establishing them, with companies like Merck & Co., Novo Nordisk A/S, and Eli Lilly & Co. embarking on U.S. expansions since the beginning of 2023.
It is important to recognize that China is a critical provider of active pharmaceutical ingredients as well as finished medications. The U.S. has extended its temporary arrangement with China until November 10, with maximum tariffs on Chinese goods capped at 30%. For patients, the prospect of tariffs rising from 0% to 30% is surely painful, but still significantly better than facing a 100% increase. Expect some stockpiling behavior reminiscent of what occurred before the implementation of the original tariffs.
Several analysts have also raised the point that there might be more to these drug tariffs than initially meets the eye. For example, from CNN:
In a post on Truth Social, Trump outlined criteria necessary to avoid the tariffs. He stated, “‘IS BUILDING’ will be defined as ‘breaking ground’ and/or ‘under construction.’ Therefore, no tariff will apply to these pharmaceutical products if construction has commenced.”
Nonetheless, initiating construction can take time, making it uncertain whether these assurances will suffice to sidestep the tariffs—especially if pharmaceutical companies are already engaged in projects in other U.S. locations. Eli Lilly has indicated that it may take up to five years for new plants to become operational.
This caveat could potentially diminish the tariffs’ intended effect.
“While the President’s remarks are praiseworthy, we must temper our expectations for their potential impact,” noted Jared Holz, an analyst at Mizuho. “Most major players already have a manufacturing presence in the U.S., and nearly all have announced increased investments tied to local production.”
If significant shortages emerge or if distressing stories gain traction in the media, Trump may choose to amend his criteria for what constitutes ‘under construction’ or issue waivers for specific medications.
It’s also noteworthy that Indian drug manufacturers might be a primary target here. Trump had previously excused Indian suppliers from his 50% tariffs, and many assume that they will again be spared due to their nearly exclusive focus on generic drugs; meanwhile, attention is given to patented products.
However, he has included branded products in this latest sweep; thus, any generic with a name other than its compound label could theoretically be affected. Reactions from the media and investors in India indicate a significant concern regarding potential impacts:
🚨 100% tariffs on branded/patented pharma products
how bad is bad for India?
– ~$20B in pharma goods imported yearly to the U.S.
– ~$50B in revenues for Indian pharma annually.
– Total impact ~2%, or ~$1B, from exported branded/patented products to the U.S… pic.twitter.com/iIMfMlcJoB— pankaj padwal (@padwalpankaj9) September 26, 2025
For further details, refer to the Economic Times of India, which provides a comprehensive outlook on the nature of the tariffs and the implications for various drug manufacturers:
In the wake of the announcement, Indian pharmaceutical stocks saw significant declines on September 26…
What impact can be expected for Indian drug manufacturers?
India remains a leading supplier of medicines to the U.S., with pharmaceutical exports valued at USD 12.72 billion in 2024, constituting the largest industrial export sector for the country. Indian pharmaceutical companies play a vital role in the U.S. healthcare system, filling four out of every ten prescriptions. Reports indicate that medicines sourced from Indian suppliers have saved the U.S. healthcare system USD 219 billion in 2022 alone, and USD 1.3 trillion from 2013-2022. In the coming five years, generic drugs from India are expected to deliver an additional USD 1.3 trillion in savings.
The current scenario suggests that numerous patients may face substantial price increases if they need drugs affected by these tariffs and lack access to generic alternatives. We can expect further developments on this issue in the days to come.
A reader, Jason Boxman, has also pointed out another impending tariff issue. According to a New York Times report:
On Wednesday, the Trump administration announced that it would begin new investigations into the imports of robotics, industrial machinery, and medical devices, which could result in additional tariffs.
This situation is somewhat ironic, as it suggests that Trump’s administration may not fully understand the significance of these technologies in reshaping American manufacturing. Right now, they seem content to cause destruction without a coherent plan for regeneration. Once the repercussions set in, it may be too late for an effective reversal of this misguided approach.
