Trump targets drug imports with tariffs up to 200%
US president Donald Trump announced on Tuesday his intention to levy substantial tariffs on imported semiconductors and pharmaceuticals, with proposed rates for medicines potentially reaching 200%. While outlining these aggressive trade measures, the president indicated a grace period of approximately one year for drug manufacturers to adjust their supply chains and operations, a report from BNN Bloomberg highlighted.
During a Cabinet meeting at the White House, Trump addressed reporters, stating, “We’re going to give people about a year, a year and a half to come in and, after that, they’re going to be tariffed.” He elaborated, “If they have to bring the pharmaceuticals into the country… they’re going to be tariffed at a very, very high rate, like 200 per cent. We’ll give them a certain period of time to get their act together.”
National security concerns cited
The proposed tariffs are rooted in a Section 232 investigation launched by the Trump administration in April, examining the pharmaceutical industry. This probe is based on the premise that extensive reliance on foreign production of medicine constitutes a national security threat. The US Commerce Department, responsible for this investigation, has yet to issue its official report.
Commerce secretary Howard Lutnick informed CNBC that details regarding pharmaceutical tariffs “will come at the end of the month.” He added that studies for both pharmaceuticals and semiconductors are nearing completion, after which “the president will then set his policies.”
Industry pushback and potential impact
Pharmaceutical companies have voiced significant opposition to such tariffs, warning that they could lead to increased costs, deter investment within the US, and disrupt the critical drug supply chain, ultimately jeopardizing patient access to essential medications.
Alex Schriver, senior vice president of public affairs for PhRMA, the industry’s largest lobbying group in the US, reiterated these concerns in a statement. “Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures for patients,” he said. He emphasized that medicines have historically been exempt from tariffs due to their potential to inflate costs and cause shortages.
Despite these warnings, Trump has maintained that tariffs will incentivize drug companies to repatriate manufacturing operations to the US, a goal he argues is crucial for national security and economic independence. The announcement comes amidst the administration’s broader push for “reciprocal” tariffs, including a newly imposed 50% tariff on copper imports. The long-term effects of these proposed pharmaceutical tariffs on drug prices and availability in the US remain a significant concern for consumers and healthcare providers alike.
