Trump causes a stir with new tariffs

In a surprising move, President Donald Trump announced a new wave of import tariffs that will take effect on October 1, affecting various product categories such as furniture, kitchen cabinets, pharmaceutical products, and trucks. Kitchen and bathroom cabinets and similar products will be subject to a 50 percent tariff, upholstered furniture to 30 percent, and foreign trucks to 25 percent. Pharmaceutical products are particularly hard hit, facing a tariff of 100 percent. Trump argued on social media that these measures are necessary to address the national security interests of the United States and protect the domestic manufacturing process. The new import tariffs could significantly burden various segments of the U.S. economy, which is already struggling with double-digit tariffs that affect hiring policies and investments. However, Trump mentioned certain exemptions to mitigate the impact of tariffs on medications. Pharmaceutical companies that establish new production facilities in the U.S. or have already begun construction could be exempt from the tariffs. This particularly affects patented and branded medications. A provisionally concluded trade agreement with the European Union in August already includes a 15 percent tariff on imported branded medications, though it is unclear to what extent Trump's announcement will affect this agreement. Financial markets initially reacted calmly to the news of the new tariffs. The Dow Jones and the S&P 500 started the trading day up. Luxury furniture companies like Wayfair and RH experienced pre-market selling pressure but later recovered. Stocks of pharmaceutical manufacturers like Eli Lilly and Pfizer posted slight gains. President Trump invokes executive authority for these new tariffs, independent of the global tariffs currently being argued before the Supreme Court. These import tariffs fall under the national security clauses of Section 232, which the Trump administration has already applied to steel, aluminum, and copper.