Trump Imposes Steep Tariffs on Copper and Pharmaceuticals: Implications for Indian Exports

NEW DELHI / WASHINGTON • In a significant policy shift, U.S. President Donald Trump on July 8 announced the imposition of a 50% tariff on copper imports and signaled that pharmaceutical imports could face duties as high as 200% within the next year. The new measures form part of a broader tariff regime targeting strategic sectors such as semiconductors, critical minerals, and medicines. The tariffs are set to take effect from August 1, 2025, with no further extensions to the deadline, the President confirmed during a Cabinet meeting at the White House.

High-Stakes Tariffs on Key Sectors

The 50% tariff on copper marks the latest addition to an expanding list of U.S. trade barriers that already includes duties on steel and aluminum. Trump clarified that pharmaceutical products will be given a grace period of approximately 12 to 18 months before the 200% tariff comes into effect. “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 at a very, very high rate—like 200%,” he stated.

These policy moves are aimed at strengthening domestic manufacturing and reducing dependency on foreign supply chains, particularly from nations deemed strategic competitors. However, the announcement is already causing ripple effects across global markets, especially in countries with strong export linkages to the U.S.

Impact on India: Copper Sector Faces Moderate Risk

India exported an estimated $2 billion worth of copper and copper products globally during FY 2024–25. Of this, around $360 million—approximately 17%—was directed to the United States, making it India’s third-largest copper export destination after Saudi Arabia and China.

While the tariffs could dampen Indian copper exports to the U.S., analysts expect the overall impact to be moderate due to India’s diversified export portfolio and growing domestic demand. Copper remains a critical input for sectors such as renewable energy, infrastructure, electric vehicles, and electronics—offering Indian producers alternative growth avenues outside of the U.S. market.

Pharmaceutical Sector Faces Sharper Threat

India’s pharmaceutical exports to the U.S. present a more vulnerable front. The U.S. remains India’s largest pharma export destination, accounting for $9.8 billion in FY25—a 21% rise from the previous fiscal year. Generic medicines dominate this trade, forming a vital component of the U.S. healthcare system, where generics make up over 90% of all prescriptions.

A 200% tariff could render these generics commercially unviable, pricing out Indian exporters and threatening the affordability of essential medications in the U.S. Smaller firms in particular, which constitute a significant portion of India’s generics sector, may struggle to remain competitive or absorb such a cost burden. In response to Trump’s remarks, Indian pharma stocks registered intraday losses of 2–4% across several major firms.

Trade Talks Offer a Window of Relief

The future trajectory of these tariffs may depend heavily on the outcome of ongoing trade negotiations between New Delhi and Washington. President Trump hinted at progress, stating, “We’re close to making a deal with India… Others we met with and we don’t think we’re going to be able to make a deal, so we just send them a letter. If you want to play ball, this is what you have to pay.”

As part of the pre-August 1 enforcement strategy, formal tariff notices have already been dispatched to countries including Bangladesh, Cambodia, Japan, South Korea, and South Africa. India has not yet received such a letter, which many interpret as a sign of advanced discussions between the two governments. Should a deal be reached ahead of the deadline, it could include exemptions or phased implementation for sensitive sectors like pharmaceuticals and copper.

BRICS Tariff Remarks Add Geopolitical Dimension

During the same Cabinet session, Trump reiterated his earlier position that imports from BRICS nations may face a uniform 10% tariff. Dismissing the bloc as “not a serious one,” he nonetheless acknowledged its attempts to challenge the global influence of the U.S. dollar. While no BRICS-specific tariffs have yet been imposed on India, its membership in the group may shape the geopolitical context of future trade decisions.

What Lies Ahead?

With less than a month until the August 1 deadline, all eyes are on the progress of bilateral talks. If a trade pact is finalized, Indian exporters could be granted relief through either exemptions or gradual implementation of the tariffs. For the copper sector, the outlook remains cautiously optimistic due to robust domestic demand and alternative export markets such as China and Saudi Arabia.

The pharmaceutical sector, however, remains in a high-risk zone. While larger Indian firms may explore U.S.-based manufacturing as a hedge against tariffs, such strategies require regulatory clearances, capital investment, and time—luxuries that smaller exporters may lack.

The Indian government is expected to intensify diplomatic efforts to secure exemptions for critical exports. Simultaneously, export diversification toward emerging markets in Latin America, Africa, and Southeast Asia may become central to India’s long-term trade strategy.

As the global trade environment grows increasingly protectionist, the coming weeks will prove crucial in determining whether Indian exporters can navigate the storm—or bear the brunt.