U.S. imposes tariffs on medicines, copper

US President Trump has taken measures to expand domestic production of strategic materials. On July 8, the United States announced that it would impose a 200% tariff on drugs and drug raw materials imported from overseas, and a 50% tariff on copper and copper-related products. The move aims to promote investment in the country and supply chain adjustments through high tax rates, and strengthen US security.

The US government plans to set a grace period of more than one year for drugs, and then impose additional tariffs. This rate is the highest among the various categories of tariffs that have been announced. Statistics from the US Department of Commerce show that the import value of US drugs will reach US$246.8 billion in 2024, accounting for 7.6% of the total US imports. Statistics from the US research company IQVIA show that the size of the US drug market reached US$797.8 billion in the same year, accounting for more than 40% of the world, of which 30% depends on imports.

Affected by Trump’s announcement of drug tariffs, pharmaceutical companies striving to achieve localized production have released news one after another. Companies such as Merck in the United States and Novartis in Switzerland have stated that they will invest. Since the Trump administration came to power in January 2025, six well-known European and American companies have newly announced a total investment in the United States of $166 billion, equivalent to nine times the average annual equipment investment in the past 10 years.

Trade statistics from the Japanese Ministry of Finance show that Japan’s “pharmaceuticals” exports to the United States in 2024 will be 411.4 billion yen, accounting for 1.9% of total exports to the United States. Japanese pharmaceutical companies’ sales are highly dependent on the US market, but their production bases are scattered around the world, including the United States.

Takeda Pharmaceutical’s US business accounts for half of its consolidated sales. After Trump announced tariffs on drugs in May 2025, Takeda Pharmaceutical said it would invest $30 billion in the United States over the next five years. In addition to investments in production bases, it also includes research and development expenses. At the same time, Takeda Pharmaceutical President Christophe Weber said, “For imported products that may be affected by tariffs, countermeasures including inventory and supply chain management will be implemented.”

Eisai plans to transfer part of the production of the technical drug of Lecanemab, a drug for Alzheimer’s disease developed jointly with Biogen of the United States, to the United States. Eisai is preparing to start a new technical drug production line at its plant in North Carolina.

The high tariff on copper also caught the market by surprise. This is because many people had predicted that it would be only 25%. On July 8, copper futures (the most actively traded settlement month) on the New York Mercantile Exchange (COMEX) rose 17% from the previous day to $5.8955 per pound (about $13,000 per ton), setting a record high.

“It’s surprising that a 50% tariff was imposed at the beginning,” said Nomura Securities economist Yuki Takashima on July 9. Trump signed a presidential order to impose tariffs on copper in February. Voices that the tariff is inevitable are spreading, while most analysts believe that copper will initially be as low as 25%, just like aluminum, which is also a non-ferrous metal.

Copper consumption is expected to remain strong in the future. It is used not only in power infrastructure such as electric wires, but also in many fields such as pure electric vehicles (EVs) and home appliances. It is not clear what the tax scope of ore, copper ingots and processed products will be.

According to statistics from the United States Geological Survey (USGS), more than 40% of the copper consumed in the United States in 2024 depends on imports. The United States imports less copper ore, but imports more smelted copper. It plans to expand production and smelting bases in the country, increase production by 70% by 2035, and reduce import dependence to 30%.

There is also a view that the high tariffs are taken into account China, the world’s largest producer. From the perspective of the source countries of smelted copper imports from the United States (2020 to 2023), Chile has the largest share, accounting for more than 60%. Canada, with about 10%, is close behind. Although the import volume from China is considered limited, there are also observations that the trend of competing for resource rights and interests on a global scale cannot be ignored.

Naohiro Shinmura, co-representative of Japan Market Risk Advisory, pointed out that “if you want to expand domestic production, subsidies and other measures are more realistic.” He also said, “Some analysts believe that the United States imports copper to a certain extent from Chinese-invested companies in Central and South America, and the high tariffs may also be intended to restrain these companies.”