US President Donald Trump on Thursday announced 100 per cent tariffs on pharmaceutical drugs, saying they will take effect on October 1. Mr Trump said the tariffs, however, 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 post offered no further details, and the White House didn't release more specifics.
In 2024, the US imported nearly $233 billion in pharmaceutical and medicinal products.
Nearly 90% of US biotech companies reportedly rely on imported components for at least half of their approved products.
In April, the Trump administration began investigating the impact of all drug imports - both finished generic and branded medicines as well as the ingredients used to make them - on US national security.
In early July, Mr Trump said he intended to give drug companies some leeway to bring their operations to the US before slapping tariffs of as much as 200 per cent on their products. On July 15, he said he was likely to begin imposing tariffs on pharmaceuticals by the end of the month. In late July, the US and EU reached a broad trade agreement that included 15 per cent tariffs on pharmaceutical products.
Trump's Pharmaceutical Tariffs' Impact On India
The US is India's largest market and accounts for slightly more than a third of New Delhi's pharmaceutical exports, which comprise mainly cheaper generic versions of popular drugs.
Dr Reddy's Laboratories, Zydus Lifesciences, Hetero Labs, Lupin, Aurobindo Pharma and Sun Pharmaceutical are major exporters of drugs and active pharmaceutical ingredients to the US.
They shipped $3.6 billion worth of goods to the US last year and $3.7 billion in January-June this year.
The latest US tariffs mainly target branded and patented drugs, where multinational companies like Pfizer and Novo Nordisk dominate. It, however, was not immediately clear whether complex generics and speciality medicines from India would also be under the scanner.
Trump's Tariffs On India
Donald Trump last month imposed a 25 per cent reciprocal tariff on India and an additional 25 per cent as a penalty for buying Russian oil.
Mr Trump, who returned to power in January, has accused New Delhi of fueling Moscow's deadly attacks on Ukraine by purchasing Russian oil.
India has said the US tariffs are "unfair, unjustified and unreasonable".
The two countries are currently engaged in trade talks.
