Trump's 50% Tariff On Copper, 200% Pharma Warning: How It Impacts India

Trump's 50% Tariff on Copper, 200% Pharma Warning: How It Affects India

In a major policy change, U.S. President Donald Trump announced a 50% tariff on copper imports and warned of a potential 200% tariff on pharmaceuticals within a year. These actions are part of the broader Liberation Day tariffs aimed at tackling the U.S. trade deficit. For India, this news is particularly troubling since the U.S. is its largest overseas market for pharmaceuticals and a key destination for copper exports. 

What Trump Said

During a recent cabinet meeting, President Trump said, “Today we’re doing copper. I believe the tariff on copper, we’re going to make it 50 percent.” Commerce Secretary Howard Lutnick later confirmed that the copper tariff would likely start at the end of July or on August 1. Trump also mentioned that the U.S. would soon announce details on pharmaceuticals, giving manufacturers time to move their operations to the U.S. He stressed, “We’re going to give people about a year, a year and a half to come in, and after that, they’re going to be tariffed. They’re going to be tariffed at a very, very high rate, like 200 percent.”

How These Tariffs Will Affect India

Copper Industry

India exported $2 billion worth of copper and copper products globally in 2024-25. Of that amount, exports to the U.S. were $360 million, or 17%. The U.S. is India's third-largest market for copper exports, following Saudi Arabia and China. The 50% tariff on copper could cut demand from the U.S., which may impact India's copper industry. However, copper is an essential mineral used in various sectors, including energy, manufacturing, and infrastructure. Any drop in U.S. demand might be balanced out by the domestic market.

Pharmaceutical Sector 

India is the largest exporter of generic drugs to the U.S., with exports rising to $9.8 billion in FY25, an increase of 21% from the previous year. This represents 40% of India’s total pharmaceutical exports. A 200% tariff on pharmaceuticals could greatly hurt demand, especially since India’s generics industry is vital in providing affordable medicines in the United States.

Potential for a Mini-Trade Deal 

India is currently working on a mini-trade deal with the U.S., which will likely address all sectoral tariffs. If the deal is finalized before the August 1 deadline, the new tariffs might not negatively affect Indian markets. 

Conclusion 

President Trump's plan to impose tariffs on copper and pharmaceuticals will have significant effects on India's trade with the United States. The copper industry may face difficulties, but the pharmaceutical sector could suffer even more. India’s ongoing talks for a mini-trade deal with the U.S. could provide a way to lessen the impact of these tariffs.