100% Tariff on Branded Drugs
President Donald Trump announced that starting October 1, 2025, the U.S. will impose a 100% tariff on all branded or patented pharmaceutical imports, unless the manufacturer is actively building a production facility in the U.S..
- The exemption applies only to companies that have broken ground or begun construction on domestic plants.
- Trump posted: “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
Strategic Pressure on Big Pharma
- The move is designed to force multinational drugmakers to localize manufacturing, citing national security and supply chain resilience.
- Trump hinted that tariffs could escalate to 150% or even 250% if companies fail to comply.
Global Ripple Effects
- Pharma stocks in India, China, and Europe dipped sharply following the announcement.
- India, which supplies nearly 20% of global generic drugs, may see limited immediate impact, but firms moving into patented and specialty drugs could be hit.
- Analysts warn of higher U.S. drug prices, potential shortages, and trade retaliation.
Domestic Incentives
- The policy aligns with Trump’s broader push for onshoring critical industries, alongside new tariffs on furniture (50%), heavy trucks (25%), and kitchen cabinetry (30%).
(Source – CNBC)
—Agencies
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