Trump Warns of Major Tariffs on Drug Imports, Alarming Pharma Sector

• Apr 09, 2025

US President Donald Trump has warned that he will soon impose significant tariffs on imported pharmaceuticals, ending decades of minimal trade barriers on medicines. His remarks have raised alarm among pharmaceutical companies, buyers, and global trade partners.

Trump made the announcement during a Republican Party fundraiser on Tuesday, saying a major tariff plan for pharmaceutical products would be revealed shortly. He said the move was aimed at pushing companies to shift their operations away from China. “We’re going to be announcing very shortly a major tariff on pharmaceuticals. And when they hear that, they will leave China,” he said.

Last week, the US introduced a blanket 10% tariff on imported goods as part of broader efforts to revive domestic manufacturing. The new “reciprocal” tariff structure now includes a steep 104% duty on goods from China and has intensified the ongoing global trade war.

Pharmaceutical products, long shielded from such trade actions due to a 1995 World Trade Organization agreement, may now be next in line. For years, the US has allowed the import of finished medicines from India, Europe, and China without imposing tariffs, although active pharmaceutical ingredients (APIs) have faced some duties.

In 2024 alone, the US imported $213 billion worth of medicines—more than double the value from ten years ago. India, a key supplier, provides nearly half of the generic drugs used in the US, significantly cutting healthcare costs. Indian pharmaceutical stocks dropped sharply following Trump’s comments, as industry leaders warned that new tariffs could force price hikes.

Indian firms such as Cipla and Dr Reddy’s, despite having US-based plants, argue that moving full production to America is not feasible due to the low profit margins on generic drugs. Currently, US imports of Indian medicines attract little or no tax, compared to the 11% duty India imposes on American drug imports.

European drugmakers are also watching developments closely. The European Federation of Pharmaceutical Industries and Associations (EFPIA) has warned that higher US tariffs could shift production out of Europe. Pharmaceuticals are the EU’s top export to the US, valued at $127 billion in 2024.

Global giants like Pfizer, GSK, and Novartis, with operations spanning Ireland and Germany, face potential disruptions if new tariffs are introduced. Industry leaders are now urging the EU to respond with policies that maintain competitiveness and protect global supply chains.