Trump wants to force international pharmaceutical companies to relocate their production to the USA. If you do not do this, the new surcharges of 100 percent will come into force after 120 days. For smaller companies, a deadline of 180 days applies, as a US government official announced. This applies to countries that have not yet concluded a customs agreement with the USA.
According to the decree, changes will come into force for metals from Monday. Finished products that contain significant amounts of steel, aluminum or copper will then be subject to a 25 percent tariff. So far the rate is 50 percent.
The chairman of the Trade Committee in the EU Parliament, Bernd Lange (SPD), welcomed this adjustment. “This is a first, welcome step,” explained Lange. However, “a lot more has to follow” in order to return to the agreements in the customs agreement with the USA from last summer. 25 percent is still more than the agreed 15 percent – and this remains the “final landing zone,” said Lange.
“For many machines from Europe, a flat rate of 25 percent will be due from April 6th,” explained Oliver Richtberg from the VDMA mechanical engineering association. The industry is still under significantly greater strain than before Trump. In addition, the US customs regulations involve a lot of bureaucratic effort because companies have to prove where the steel and aluminum used were cast or melted.
The EU Commission announced that it would “examine” the impact of the latest announcements from Washington on EU imports. The measures would affect a “wide range of products”, including beer cans, cosmetics, machinery and machine parts, agricultural equipment and motorcycles. The Commission will continue to work towards “reducing” tariffs in line with the joint agreement with the US, it said.
EU politician Lange described the special tariffs on medicines as “completely inappropriate”, even if the EU was not affected. “In the short term, the burden of the reduced EU tariffs will remain limited, but considerable strategic pressure will already arise on European pharmaceutical companies during the transition phase,” objected the Association of Research-Based Pharmaceutical Companies. You would now have to consider investing in the USA. In addition, the established globally integrated supply chains would be disrupted.
The USA currently imposes a special 10 percent tariff on most EU products. It applies in addition to regular tariffs that existed before Trump’s term in office and which average 4.8 percent. With the special surcharges, Trump replaced his general tariff from last year, which the Supreme Court had overturned.
