U.S President Donald Trump has announced plans to soon impose “major” tariffs on imported pharmaceuticals, a move that could disrupt decades of affordable global trade in medicines.
Historically, most countries, including the US, have imposed few or no tariffs on finished drugs, largely due to a 1995 World Trade Organization (WTO) agreement designed to keep medicines accessible.
However, this shift comes after Trump introduced a blanket 10% tariff on other imports last week as part of a broader push to bring manufacturing back to the US. His new “reciprocal” tariffs, including a steep 104% duty on goods from China, took effect on Wednesday, escalating the global trade war and unsettling markets.
Pharmaceutical buyers, who have so far been exempt from such tariffs, are now bracing for the potential impact. The US has traditionally imported large quantities of finished medicines from countries like India, Europe, and China without paying tariffs, though active pharmaceutical ingredients (APIs) used in drug production are subject to some duties.
At a fundraiser dinner for the Republican Party on Tuesday, Trump revealed, “We’re going to be announcing very shortly a major tariff on pharmaceuticals. And when they hear that, they will leave China.” He further told reporters aboard Air Force One last week that “pharma” tariffs would be set at an unprecedented level, with announcements expected “in the near future.”
In 2024, the US imported $213 billion worth of medicines, more than two and a half times the total from a decade ago. While Trump’s comments were vague, they have already caused concern among buyers, particularly those reliant on Indian imports.
India supplies nearly half of all US generics, offering cheaper alternatives to popular drugs and saving the country billions in healthcare costs.
