Trump Announces 100% Tariff on Pharmaceutical Imports Unless Companies Build US Manufacturing Plants

Washington:

US President Donald Trump on Thursday announced 100% tariffs on pharmaceutical drugs, stating they will take effect on October 1. Mr. Trump clarified that these tariffs would not apply to companies that are building manufacturing plants in the US, which he defined as either "breaking ground" or being "under construction."

"Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. 'IS BUILDING' will be defined as, 'breaking ground' and/or 'under construction.' There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter," he posted on Truth Social.

His announcement did not provide further details, and the White House has not released additional specifics.

In 2024, the United States imported nearly $233 billion in pharmaceutical and medicinal products.

Reports indicate that nearly 90% of US biotech companies depend on imported components for at least half of their approved products.

In April, the Trump administration initiated an investigation into the impact of all drug imports - both finished generic and branded medicines as well as the ingredients used to manufacture them - on US national security.

Earlier in July, Mr. Trump indicated he intended to give pharmaceutical companies some flexibility to relocate their operations to the US before implementing tariffs of up to 200% on their products. On July 15, he mentioned he would likely begin imposing pharmaceutical tariffs by month's end. In late July, the US and EU reached a comprehensive trade agreement that included 15% tariffs on pharmaceutical products.

The impact of Trump's pharmaceutical tariffs on India could be significant. The US represents India's largest market, accounting for slightly more than one-third of New Delhi's pharmaceutical exports, which primarily consist of more affordable generic versions of popular drugs.

Major Indian exporters to the US include Dr. Reddy's Laboratories, Zydus Lifesciences, Hetero Labs, Lupin, Aurobindo Pharma, and Sun Pharmaceutical. These companies exported $3.6 billion worth of products to the US last year and $3.7 billion in the first half of this year.

The newly announced US tariffs primarily target branded and patented drugs, a market dominated by multinational companies such as Pfizer and Novo Nordisk. However, it remains unclear whether complex generics and specialty medicines from India would also fall under these new tariff regulations.

This announcement follows Trump's imposition last month of a 25% reciprocal tariff on India, plus an additional 25% penalty for purchasing Russian oil. The former president, who returned to office in January, has accused New Delhi of supporting Moscow's military actions in Ukraine through its oil purchases.

India has responded by calling the US tariffs "unfair, unjustified and unreasonable." The two countries are currently engaged in trade negotiations.