President Donald Trump has indicated the possibility of imposing tariffs on imported pharmaceuticals that could rise up to 250%, indicating the highest rate he has proposed so far.
President Trump shared his plans to initially impose a “small tariff” on pharmaceuticals, with the goal of raising it to 150%, and eventually to 250% within a year to 18 months, on CNBC's "Squawk Box" on Tuesday. The move is part of his broader strategy to encourage drug companies to bring their manufacturing operations back to the United States.
"We want pharmaceuticals made in our country," stated the President.
Despite Trump’s previous threats and subsequent changes of course on tariff proposals, there is no certainty that pharmaceutical tariffs will ultimately reach the 250% mark. In early July, President Trump warned that he could impose 200% tariffs on pharmaceuticals.
In April, the Trump administration launched a Section 232 investigation into pharmaceutical products. This provision empowers the Commerce Secretary to assess whether imports pose a threat to national security.
Pharma Faces Heat As Trump Targets High Drug Costs
This threat of imposing tariffs comes against the backdrop of President Trump’s recent ultimatum to 17 major pharmaceutical companies, demanding that they lower drug prices in the U.S. or face severe consequences. On Aug. 1, Trump issued a 60-day ultimatum to companies including AbbVie (NYSE:ABBV), Amgen (NASDAQ:AMGN), Eli Lilly (NYSE:LLY), and Pfizer (NYSE:PFE).
In the past six months, firms such as Eli Lilly and Johnson & Johnson have unveiled new U.S. investments in an effort to build goodwill with President Trump. However, the pharmaceutical industry has cautioned that the proposed tariffs could drive up costs, discourage further investment in the U.S., and disrupt the drug supply chain—ultimately endangering patient access to essential medications.
Furthermore, the pharmaceutical industry is already grappling with the financial impact of the new trade deal between the U.S. and the European Union (EU). The U.S. is set to impose a 15% tariff on branded drugs imported from Europe, potentially leading to increased drug prices and limited access for consumers.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
