Copper, pharma tariffs are coming as Trump hardens trade stance

Tariffs of up to 200 per cent on imported pharmaceutical products will kick in after a grace period giving companies time to adjust their supply chains.

Donald Trump speaks during a cabinet meeting. Picture; AFP.

US President Donald Trump has hardened his stance on trade deals, saying there would be no more extensions past a new August 1 deadline, as the administration said it would continue to announce country-specific tariff rates.

Mr Trump said during a cabinet meeting on Tuesday (local time) that he would continue issuing letters to the leaders of other countries announcing US tariff rates on their products effective August 1 unless they arranged a specific deal by then.

In addition, the White House said it would set 50 per cent tariffs on copper imports on Wednesday (AEST), an announcement that sent the commodity’s price to a record, though it did not clarify when they would take effect.

And tariffs on imported pharmaceutical products would kick in after a grace period giving companies time to adjust their supply chains, Mr Trump said.

It was part of a swirl of trade announcements in the past few days as the Trump administration hurtles toward a self-imposed deadline for so-called reciprocal tariff rates to kick in after a 90-day pause. That deadline is Wednesday (local time).

In a post on his Truth Social platform on Wednesday (AEST), Mr Trump said: “We will be releasing a minimum of 7 Countries having to do with trade, tomorrow morning, with an additional number of Countries being released in the afternoon.”

Mr Trump has taken to settling the tariff question himself, favouring a unilateral approach and announcing his decisions by letter and posts on social media.

“The deals are mostly my deal to them,” Mr Trump said. “We’re picking a number that’s low and fair.”

It follows the example Mr Trump set on Monday, when he released 14 letters addressed to the leaders of countries scattered mostly across Asia and Europe. The letters set US tariff rates on imports from those countries at between 25 per cent and 40 per cent.

Mr Trump said during Tuesday’s cabinet meeting that he considers the letters to be deals.

The US will be sending a letter to the EU this week. “We’re probably two days off from sending them a letter, ” he said.

It is emblematic of Mr Trump’s approach to trade, which has been to threaten high levies to draw countries to the bilateral negotiating table, then to pause those levies while deals are being worked out, then to draw a new line in the sand.

Just a few trade deals have been announced since Mr Trump’s “Liberation Day” tariff announcement on April 2, which he then paused a few days later, including deals with the UK and Vietnam. A current deal with China is temporary and expires in August, slightly after the deadline now applied to other countries.

Mr Trump now says there will not be any more extensions to negotiate new deals after August 1.

Mr Trump’s tariff letters on Monday, which were nearly identical to each other, also explained that goods shipped through third countries to avoid tariffs would still face the same levies, and that the rates would go up if countries retaliated.

The current tariffs have brought in $100bn so far this year, Treasury Secretary Scott Bessent said during Tuesday’s cabinet meeting. He added that tariff revenue could rise to $300bn by the end of 2025.

Copper is the latest industry to be targeted under sector-oriented tariffs applied under Section 232 of a 1960s trade law.

Already Mr Trump has applied such sector tariffs on imports of vehicles, steel and aluminium.

Other sector tariffs are still pending, including for lumber, pharmaceuticals and semiconductors.

The Section 232 tariffs have been a sticking point in some trade negotiations with other countries.

The sector tariffs will not stack on top of the country-specific rates.

Setting copper rates at 50 per cent, rather than the 25 per cent that aluminium and steel tariffs began at before ratcheting higher, suggests that the White House may make other future sector-based rates much higher, says Henrietta Treyz, head of economic policy research at Veda Partners.

Indeed, Mr Trump said on Tuesday that the pending pharmaceutical tariffs may reach 200 per cent.

“We will be announcing something very soon on pharmaceuticals,” he added.

US trading partners are weighing responses after Mr Trump’s latest action on tariffs sparked a stock market sell-off on Monday.

China, which agreed in June on a broad framework for trade but has yet to complete a more permanent agreement, has a slightly later deadline of August 12.

A state-sponsored media outlet said Tuesday the country should oppose any deal that hurts Chinese interests, such as incentives to cut China out of supply chains, according to a report by Reuters.

Japan’s Prime Minister Shigeru Ishiba said on Tuesday that he would continue negotiations with the White House.

Mr Trump singled out Japan last week as one country that had been tough to work with and which was unlikely to get a deal by the deadline.

South Africa received a letter on Monday saying its products would have a 30 per cent tariff coming into the US starting August 1.

The country’s President, Cyril Ramaphosa, said in a statement on Tuesday that the levy was “not an accurate representation of available trade data”.

He also said that under South Africa’s interpretation of the data, its average tariff on imported goods stands at 7.6 per cent and 77 per cent of US goods entering South Africa have no duties.

He added that South Africa would continue with its diplomatic efforts toward a “more balance and mutually beneficial” trade relationship with the US.

The next big question is what kind of arrangement will be reached with the EU. An EU spokesman said on Monday that he was hoping for a deal before the deadline.

The return of tariff volatility sent stocks tumbling on Monday afternoon. Stocks were largely flat on Tuesday, with the S & P 500 and Nasdaq Composite trading around break-even.

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