Trump is imposing tariffs of up to 100% on imported medicines
U.S. President Donald Trump has effectively declared "war" on foreign drug manufacturers. His administration is imposing heavy tariffs on imported drugs to encourage the relocation of production to the United States.
This was reported by Bloomberg.
Under the new rules, the U.S. is imposing tariffs of up to 100% on certain patented drugs manufactured abroad by countries that do not have special trade agreements with Washington. A 120-day transition period has been established for large pharmaceutical corporations, while small businesses have been given 180 days to adapt.
For strategic partners, including the EU, Japan, and Switzerland, the tariff rate is capped at 15%.
This decision is part of Trump’s “America First” economic strategy. Some pharmaceutical giants have already agreed to the White House’s terms. In particular, Merck & Co. and Eli Lilly & Co. were able to avoid harsh sanctions by agreeing to compromise terms.
The U.S. administration is demanding that pharmaceutical companies:
- significant price reductions under the Medicaid program;
- direct sales of drugs to American consumers;
- launch new drugs in the U.S. at prices no higher than in other developed countries.
If a company agrees to partially relocate production to the U.S., the tariff may be reduced to 20%. And after signing a special Most-Favored-Nation agreement, the rate could be reduced to zero by January 20, 2029.
Despite the stated support for domestic manufacturers, the industry is already expressing concern. Experts warn of the risks of drug shortages and the disruption of global supply chains.
It is noted that Americans already spend the most in the world on healthcare, and the new tariffs could make treatment even less affordable. While there may not be an immediate price hike, the consequences will become apparent over time—through higher insurance premiums or increased copayments for medications.
For now, the restrictions do not apply to generics—cheaper versions of drugs. However, the U.S. Department of Commerce plans to review this segment within the year, and it is possible that tariffs will be extended to them as well.
Thus, pharmaceutical companies are faced with a choice: either invest in production in the U.S. or pass on the additional costs to the end consumer.
As a reminder, the United States is considering the possibility of imposing new tariffs on goods from 60 trading partners, including the United Kingdom, European Union countries, and Canada. The initiative is linked to an investigation into the use of forced labor in manufacturing supply chains.
Additionally, the U.S. has found a way to reinstate the tariffs that were blocked by the Supreme Court.
