Despite President Donald Trump’s threat last week that tariffs on pharmaceuticals will come “very shortly,” the biopharma industry may have a brief reprieve after all—that’s if a new comment from Commerce Secretary Howard Lutnick holds up.
U.S. tariffs on pharmaceuticals and semiconductors will come “in the next month or two,” Lutnick said Sunday during an interview on ABC News’ “This Week.”
Although tariffs on pharmaceuticals may not come this week, Lutnick made it clear that they will come eventually.
Sector-specific tariffs on pharmaceuticals, semiconductors and autos “are not available for negotiation” by other countries, Lutnick said.
“They are just going to be part of making sure we reshore the core national security items that need to be made in this country,” he continued. “We need to make medicine in this country.”
The biopharma industry has been on edge after Trump said last week that he will announce “very shortly a major tariff on pharmaceuticals.” Although that wasn’t the first time the president has made a threat to impose levies on medicines, he made it sound like duties on pharma imports would arrive imminently.
Now, the extra month or two offers the industry more time to negotiate with the White House, Leerink Partners analysts said in a Sunday note.
Drugmakers are lobbying the administration to introduce pharma tariffs in phases, a proposal featuring incremental increases before the duties reach the 25% rate the president has threatened, Reuters reported earlier this month.
There have also been calls for exemptions for drugs in shortage, especially among generic drug makers, which have little operating margin to absorb increased costs from any potential tariffs.
While Lutnick’s latest comments can be viewed as a positive for the pharma industry, Trump’s tariff policies are known to be unpredictable and subject to change.
For example, word came out late Friday that tariffs on electronics, such as smartphones and laptop computers, are exempt from Trump’s reciprocal tariffs against countries. During the ABC interview, Lutnick explained that those tariffs were carved out because Trump wants to make sure that people understand the sectoral tariffs are separate from the country-specific levies.
Pharmaceuticals are already exempt from Trump’s reciprocal tariffs, which the president paused last week for most countries except China.
In addition to tariffs, the Trump administration is also considering launching a Section 232 investigation into pharmaceuticals, CNBC reported in early April. Such an investigation would determine the effect of imports on U.S. national security and could allow the president to put more restrictions on those products.
The president is already preparing to instruct the Commerce Department to launch a Section 232 investigation on semiconductor technology, Politico reports. Recent investigations into the steel, aluminum and automobile sectors took eight to nine months to complete, the Leerink analysts noted.
Even before the seemingly inevitable arrival of pharma tariffs, Trump’s onshoring push has been paying off. Last week, Novartis unveiled a $23 billion plan to build and expand 10 U.S. facilities over the next five years, following similar multibillion-dollar investment pledges from Eli Lilly and Johnson & Johnson.