Trump’s Copper, Pharma Tariffs: Major Economic Impact on India
The recent announcements by the US President, Donald Trump, of large tariffs on copper and threat of 200 percent tariff on pharmaceuticals give a heavy challenge and uncertainty to the Indian economy and its commerce relationship with the United States.
Trump’s Copper, Pharma Tariffs Could Impact India’s Trade And Economy
The recent announcements by the US President, Donald Trump, of large tariffs on copper and threat of 200 percent tariff on pharmaceuticals give a heavy challenge and uncertainty to the Indian economy and its commerce relationship with the United States. Such actions are only a project of the Trump administration to re-modify the world order system of trade relations and emphasis on internal manufacture.
Fifty percent Copper Tariff:
President Trump was ready to impose a 50-percent tariff on the imported copper, at latest on August 1, 2025. This is a huge step towards India, which sold products worth 2 billion dollars in 2024-25 around the world under the category of copper and copper products. United States had taken up $360 million of this amount, and the United States was India third largest copper export destination after Saudi Arabia and China.
The direct effect of such a tariff is that it is very likely that the price Indian copper products will raise to the buyer in the US, and this may eventually result to a fall in demand. Although the domestic copper industry of India is strong, and might be capable of absorbing part of the drop in the US demand, 50 percent tariff is a significant obstacle. Copper is one of the most important minerals with a wide application in the infrastructure, energy, and manufacturing industries and therefore the US action will increase the US production of copper and decrease dependence on foreign products. In the case of India, it may require a shift to diversify the export markets it has on copper or moving to value added products of copper that may suffer less tariff consequences.
200 percent Pharma Threat:
What is worse to India is the threat posed by President Trump to slap an up to 200 percent duty on imported drugs. Although he said that a grace period of about a year would be allowed to drugmakers so that they could get their house in order and possibly relocate their production to the US, the threat alone leaves an enormous uncertainty.
A 200% tariff on Indian pharmaceuticals would blunt demand in the U.S. and result in massive revenue losses for Indian drug manufacturers, compromising the potential for India as an intrinsic supplier to the U.S. market, and clearly demonstrating the U.S. administration’s imperative of national security and self-reliance in regard to foreign supply chains for essential goods including medicines. To Indian manufacturers, the possibility of a steep tariff represents a significant threat to the export strategy of the Indian pharmaceutical sector.
Implications for the Trade Relationship between India and the U.S.:
These tariffs are established against the backdrop of the negotiations for a “mini-trade deal” by the countries of India and the U.S. Thus far, both sides have been optimistic about concluding an agreement, but in light of the statements by President Trump and introduction of additional tariffs (including 10% tariffs on many trading partners and additional reciprocal tariffs that comprise 26% on India but which are not necessarily guided by commercial policy rationales), the timing, priorities, and procedural flexibility have become more complicated. In part, India has used the negotiations to extract relief from reciprocal tariffs and to gain access to supervised industries that employ substantial numbers of labour-intensive workers, among others.
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The outcome of these tariffs underscores how the trade policy agenda has been volatile under the Trump administration and particularly impacting India, which must now balance uncertainty and determination in the trade context. In this operational predicament, a multi-faceted approach serves India to represent itself, pursuing: (1) sustained diplomatic engagement of the U.S. to secure trade terms more favourable to India; (2) potential efforts to find replacement export markets for the Indian export overall to accommodate any lost demand from the U.S. market; and (3) leverage additional cost measures that could provide an incentive for Indian domestic manufacturers using a portion of the domestic (Indian) production to replace any lost U.S. demand.
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