When Tariffs Turn Toxic

“The game of life is like a game of

boomerangs. Our actions return

to us sooner than we think they

will, and with amazing accuracy.”

— Harry S Truman

Barely six weeks after the United States went gung-ho with its assault against India—raising tariffs on exports to 50 per cent by adding a 25-per cent ‘punishment levy’ to protest India’s Russian oil buying—the blowback has come with unnerving speed. And it is hitting where it hurts the most: US households. Pharmacies are seeing shortages of life-sustaining generics: low-cost drugs that keep cancer patients in treatment, children infection-free and diabetics stable. The pain is not confined to drugs alone. Apparel racks, jewellery counters, footwear aisles and auto assembly lines are all feeling the squeeze as Indian products disappear, only to reappear at gut-wrenching price points. From prescriptions to purses and shoes to spark plugs, tariffs meant to cripple India are bleeding Americans.

The irony is sharp. For decades, US public health has leaned on India’s pharma muscle. One-third of generics consumed come from India, supplying a bulk of America’s $7-billion imports. The Food & Drug Administration’s data lists 300 drugs in acute shortage, 70 per cent of them generics. Tariffs designed to make Indian imports costlier are not just hitting balance sheets—they are killing patients.

Doctors are warning of treatment delays and rationing. Oncologists are reshuffling chemotherapy regimens because of missing frontline drugs. Paediatric clinics are all but out of antibiotics. Pharmacies in Ohio, Arizona, New Jersey and everywhere else admit that what remains in stock is being sold at mark-ups of 40 per cent. Insurance covers part of the costs, but not for the uninsured or underinsured. For them, the choice is stark—skip doses, or go without. When healthcare becomes collateral damage in a geopolitical squabble, the casualties are measured in lives, not trade balances.

Backbone of Affordability

Generics are not a side story in US medicine; they are the backbone. Nearly 90 per cent of prescriptions filled in the US are generics, overwhelmingly supplied by India and, to a lesser degree, China. The cost dynamic is dramatic. An India-made pill retails at one-tenth the cost of its branded equivalent. Removing or constraining that supply chain equals pulling bricks from the foundation of a house. The cracks spread and the collapse happens fast. The Trump administration, meanwhile, keeps insisting that tariffs will goad domestic production. But even US pharma executives admit this is fantasy.

As Dr GV Prasad, Managing Director of Dr Reddy’s Laboratories, warned in the lead-up to the tariffs announcement: “Relocating drug production lines to the US is neither practical nor cost-efficient. To try to replicate India’s scale and efficiency overnight is expecting too much, tariffs or no tariffs.” Pharmexcil Chairman Namit Joshi was harsher: “The US is dependent on Indian and Chinese supplies. India will not be impacted. We are already focusing (strongly) on Europe, Africa and the Middle East.”

Their point is hard to refute. Pharmexcil estimates that it will take at least three years and billions of dollars for the US to rebuild even partial generic capacity. By that time, shortages will worsen and costs will rise even more. American consumers are already paying the bill for a political gesture masquerading as economic strategy.

Beyond the Medicine Cabinet

If empty pharmacy shelves aren’t bad enough, the US is also beginning to feel the absence of other Indian goods. Textiles and apparel, once a $10.3-billion export pipeline from India, now face duties of 50-60 per cent. This has already led to cancelled contracts, rerouted shipments and projections of a 25-plus per cent decline in volumes this year.

Jewellery and gems, another $8-9 billion bilateral trade channel, are also drying up. Indian exporters, already grappling with squeezed margins, are redirecting orders to Europe and the Gulf. Leather goods, handicrafts, and footwear—the everyday items that have always stocked American malls—are vanishing, replaced by pricier local options or Chinese imports. Auto components too are shifting focus, as Indian suppliers who shipped over $2 billion worth of goods annually to Detroit, are courting buyers in South-East Asia.

The downstream effects are starkly visible. US retailers complain of higher procurement costs, which they are passing on to consumers. A pair of Indian leather shoes that retailed for $100 in 2023 is now priced at $150. Jewellery chains warn that festive season sales will be hit as Indian supplies shrink. Auto firms admit that component delays are stretching assembly lines. The ‘boomerang effect’ is in motion—tariffs meant to punish India are bouncing back onto American households and industries.

Experts Ring the Alarm

Criticism of the tariff gambit is coming not just from India but from within the US itself. Dr Mariana Socal of Johns Hopkins University minced no words: “Tariffs mean higher drug prices and shortages, especially among generics.” Stephen Farrelly, ING’s Head of Healthcare, threw out numbers to highlight the pain: “A 24-week course of cancer drugs will cost patients $8,000 to $10,000 more under the new tariffs.” Billionaire entrepreneur Mark Cuban, whose CostPlus Drugs sells generics online, was scathing: “There is just no room to absorb costs. Every dollar of these tariffs falls directly on patients.”

Even US retailers are warning of ripple effects. The National Retail Federation has already declared an ‘unavoidable consumer inflation’ as Indian footwear, apparel and jewellery are priced out of the market. Auto lobbyists are whispering about the risk to jobs if component shortages persist. The disquiet is spreading, but the administration seems deaf.

Behind the tariffs lies a geopolitical calculus. The 25-per cent ‘punishment tariff’ was Trump’s way of protesting India’s continued import of Russian crude. But in trying to punish India for energy policy, he has instead punished his own people. The move has alienated a strategic partner, disrupted global supply chains and worsened America’s domestic crises, all for the US President’s optics of being ‘tough on trade’.

India, for its part, is recalibrating swiftly. Pharma shipments are being redirected to Europe, Africa, Latin America and the Middle East. Apparel exporters are diversifying toward markets in the Gulf and East Asia. Auto component makers are striking deals in ASEAN. The pain for India is real but survivable. The pain for US consumers, by contrast, is acute and immediate.

Patients Become Pawns

What makes this episode chilling is the cold reality that healthcare has been weaponized. Patients—children with infections, seniors with chronic conditions, cancer survivors clinging to remission—have become pawns in a chess game. The costs incurred by these people will not just be measured in dollars but in deferred treatments, rationed pills and lost lives.

Insurance can’t fully cushion the impact. Hospitals and clinics are seeing higher procurement bills. Pharmacies are passing on costs. The uninsured are falling through the cracks. A diabetic patient in Kansas paying double for insulin is not interested in the fine-print of US–India energy disputes. For him, the tariff is not a geopolitical manoeuvre; it is a daily sentence.

What lies ahead? This is a duel that involves two of the world’s biggest economies, each waiting for the other to blink first. The Trump administration insists India will be the one. But so far, the evidence points the other way. Indian pharma majors are pivoting successfully. Apparel exporters are finding new buyers. Even in gems and jewellery, the Gulf and European markets are absorbing excess supply. In contrast, American patients and consumers have no easy alternatives. They are trapped in a system that has for decades outsourced affordability to Indian efficiency. That dependency cannot be undone with a tariff masterplan.

The stalemate will last as long as the US justifies a policy that sacrifices the well-being its own citizens for the theatre of toughness. From pharmacies in Baltimore to malls in Boston, from Detroit’s auto plants to Dallas jewellery stores, the costs are piling up. The blowback is real. The fallout is brutal. One question stares America in the face: How many empty shelves, delayed treatments and inflated bills will it tolerate before it admits that this trade war is not just wounding India, but bleeding its own too?

He can be reached on [email protected]. Views expressed are personal. The writer is a veteran journalist and communications specialist