Trump Again Threatens Tariffs on Pharmaceuticals in ‘Not Too Distant’ Future

In a move that could potentially reshape the relationship between the United States and major trading partners, President Donald Trump has reiterated his threat to implement substantial tariffs on foreign-made pharmaceuticals, following earlier announcements regarding similar measures for automobiles and semiconductors. During a Cabinet meeting on March 24, Trump stated, “We’ll be announcing pharmaceuticals at some point in the not too distant [future] because we have to have pharmaceuticals,” as reported by Politico.

The president’s remarks left many observers pondering the exact timing and scope of these tariffs. Trump hinted that the announcement would come soon, specifying, “So we’ll be announcing some of these things in the very near future, not the long future, the very near future.” His comments suggest a deliberate build-up to tariffs targeting not only drugs but also automobiles, steel, and semiconductors.

Unclear Timing and Scope of Tariffs

Questions remain whether these industry-specific tariffs will replace or accompany incoming “reciprocal tariffs.” Trump has indicated that these reciprocal tariffs will target key trading partners, including China and the European Union (EU), with a definitive announcement expected on April 2. Interestingly, when pressed about whether the reciprocal and sector-specific tariffs will be unveiled simultaneously, Trump initially suggested they would include “everything,” only to later clarify that “not all tariffs are included that day.”

A White House official further complicated the picture, revealing that no final decisions on sectoral tariffs had been made ahead of the April 2 deadline. The uncertainty leaves industry stakeholders on edge as they contemplate the repercussions of potential tariffs on pharmaceuticals.

Potential Exemptions and Industry Concerns

Trump also hinted that he might offer exemptions for certain countries concerning reciprocal tariffs, stating, “I may give a lot of countries breaks … We’ve been very nice to a lot of countries for a long time.” It remains unclear if this sentiment will carry over to sectoral tariffs and whether specific countries might receive relief from them.

Trade groups have expressed alarm over the potential implications of pharmaceutical tariffs, citing the risk of increasing drug prices and threatening drug supply chains. John Crowley, CEO of the Biotechnology Innovation Organization (BIO), argued that “Significant tariffs on our industry will harm access to medicines [and] could potentially raise the prices of medicines intentionally or unintentionally.”

Concerns are particularly pronounced in the context of the Agreement on Trade in Pharmaceutical Products, established in 1994, which aimed to eliminate tariffs on most pharmaceutical products and their ingredients among major economies, including the U.S., Canada, China, the U.K., and Japan.

Impact on Drug Manufacturing and Prices

The U.S. pharmaceutical market, the largest globally, imported approximately $210 billion worth of medicinal products in 2024. The real worry for many in the industry lies in the potential ripple effects of tariffs. John Murphy, CEO of the Association for Accessible Medicines, noted that tariffs imposed on countries like Canada, Mexico, and China could exacerbate existing drug shortages in the U.S. He pointed out that “Generic manufacturers simply can’t absorb new costs,” emphasizing that many already operate at low or even loss-making prices.

In light of the looming tariffs, many large biopharma companies, including Pfizer, are bracing for the consequences. Reports indicate that U.S. companies are drafting contingency plans to relocate some manufacturing operations out of Ireland, particularly if reciprocal tariffs are enforced against the EU. Pfizer CEO Albert Bourla has acknowledged the enormity of the challenges presented by the proposed tariffs and suggested that shifting some production back to the U.S. might be a viable strategy to manage costs.

Future Trade Dynamics

As the situation develops, the potential levying of tariffs on pharmaceuticals raises critical questions about how the U.S. will balance its trade relationships, manage drug pricing, and support its domestic manufacturing base. Amid ongoing conversations about illegal immigration and the fight against fentanyl trafficking, Trump is leveraging tariffs to push the onshoring of drug manufacturing. The implications of these tariffs could change the landscape not just of pharmaceuticals but of U.S. trade policy as a whole.

As observers and stakeholders await further clarity from the Trump administration, the evolving situation highlights the broader implications of tariff policies in shaping international trade relations and domestic industry viability. With the April 2 announcement looming, the coming weeks will be pivotal in determining the direction of U.S. trade policy, particularly in relation to critical sectors like pharmaceuticals.