After threatening to impose “25% or higher” tariffs on foreign-made pharmaceuticals along with automobiles and semiconductors a month ago, President Donald Trump has doubled down on the pledge, although the exact timing and scope of their implementation remains unclear.
“We’ll be announcing pharmaceuticals at some point in the not too distant [future] because we have to have pharmaceuticals,” Trump said at a Cabinet meeting Monday, March 24, as quoted by Politico.
“So we’ll be announcing some of these things in the very near future, not the long future, the very near future,” Trump said, referencing his comments on car, steel and drug tariffs, according to CNBC.
It’s not clear whether the industry-specific tariffs will replace or be added to some “reciprocal tariffs,” which Trump said he would unveil April 2 targeting major U.S. trading partners, such as China and the EU.
Trump suggested that the tariffs on autos may come before April 2, but his comments hinted that other sectoral tariffs, such as those on medicines, might not be implemented until after that day. When asked at another White House event Monday whether the reciprocal and sectoral duties will come together April 2, Trump first said it would include “everything,” but then he said, “but not all tariffs are included that day.”
A White House official told Politico that the President has not yet decided whether the sectoral tariffs will be laid out April 2.
“No final decisions have been made yet on sectoral tariffs being tacked onto” the reciprocal tariffs being announced next Wednesday, the anonymous official said, as quoted by Politico.
To further complicate the situation, Trump also said Monday that he might offer exemptions for certain countries over reciprocal tariffs.
“I may give a lot of countries breaks. It’s reciprocal, but we might be even nicer than that. You know, we’ve been very nice to a lot of countries for a long time,” Trump told reporters Monday, as quoted by The Hill.
Whether that sentiment will translate into similar reprieves for certain sectoral tariffs from specific countries remains to be seen.
Tariffs on pharmaceuticals would go against a duty-free agreement that the U.S. signed on to under the World Trade Organization, which barely held up during Trump’s first term. Under the 1994 Agreement on Trade in Pharmaceutical Products, major economic entities, including the U.S., Canada, China, the U.K. and Japan, agree to eliminate tariffs on most pharmaceutical products and their ingredients.
As the world’s largest pharmaceutical market, the U.S. imported roughly $210 billion worth of medicinal products in 2024, according to Politico.
“Significant tariffs on our industry will harm access to medicines [and] could potentially raise the prices of medicines intentionally or unintentionally,” John Crowley, CEO of the Biotechnology Innovation Organization (BIO), said during a recent “Biotech Hangout” discussion, citing findings from an industry survey conducted by the trade group.
Following Trump’s initial tariffs imposed on Canada, Mexico and China, John Murphy, CEO of the Association for Accessible Medicines, said that those tariffs “could increase already problematic drug shortages.”
“Generic manufacturers simply can’t absorb new costs,” Murphy said in a February statement. “Our manufacturers sell at an extremely low price, sometimes at a loss, and are increasingly forced to exit markets where they are underwater.”
Besides recalibrating international trade dynamics and the stated goal of holding certain countries accountable to halting illegal immigration and stopping the flow of fentanyl, Trump is also leveraging tariffs to push for onshoring of drug manufacturing. The president recently called out Ireland for luring pharma companies with tax benefits.
BIO’s survey also highlights “just how dependent we are on overseas supply chain, particularly in Europe,” Crowley said.
Large biopharma companies are already bracing for the impact of additional tariffs on pharmaceuticals. Several U.S. pharma companies are making contingency plans to potentially move some manufacturing out of Ireland if Trumps imposes additional reciprocal tariffs on the EU, Irish Independent reports.
Earlier this month, Pfizer CEO Albert Bourla, Ph.D., also acknowledged that the large volume of drugs means additional tariffs would be challenging for the industry to manage. But he also said the New York pharma could try to mitigate the impact by transferring manufacturing to sites stateside.