“Starting October 1st, 2025, we will be imposing a 100 percent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America,” Trump posted on social media Thursday, with out providing specifics on which producers might be impacted. “There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started.”
Trump’s submit was one among a number of on new industry-focused tariffs set to start subsequent Wednesday. Imported heavy vehicles might be topic to a 25 percent obligation, kitchen cupboards and loo vanities might be hit with a 50 percent cost, and upholstered furnishings imports are to be taxed at 30 percent.
Taken collectively, the strikes quantity to a fast enlargement of Trump’s tariff regime, which he began to erect shortly after taking workplace. It comes at a time when the president has flexed his govt powers like none of his fashionable predecessors. Just as Trump made the levies public, former FBI Director James Comey — a longtime Trump political enemy — was indicted on perjury costs underneath heavy strain from the president.
Most European drugmakers slumped in early buying and selling, led by a drop of as a lot as 3.1 percent in Novo Nordisk A/S. GSK Plc slid as a lot as 1.1 percent, whereas AstraZeneca Plc fell as a lot as 1.6 percent.
“Trump is never going to be done with tariffs,” Deborah Elms, head of commerce coverage at Hinrich Foundation, stated on Bloomberg Television.
Trump’s posts supplied no additional particulars. The prescription drugs plan, as described by the president, might permit for huge exemptions for corporations with presences within the US. The White House didn’t instantly reply to a request for extra specifics.
The levy on branded prescription drugs might increase the typical US tariff charge by as much as 3.3 share factors, in keeping with Bloomberg Economics, although the affect could also be offset by the exemption for corporations constructing native manufacturing amenities. Singapore and Switzerland are the nations most uncovered to the transfer.
Major drugmakers, together with Merck & Co., AstraZeneca and Johnson & Johnson, have introduced billions of {dollars} in deliberate US manufacturing investments within the months since Trump’s inauguration, following the president’s repeated threats to impose levies on medication imported from abroad.
“The actual comment from the President is direct but its impact may be somewhere between nebulous and negligible,” Mizuho Securities health-care specialist Jared Holz stated in a be aware. “All major players have some production presence domestically and almost all have announced increased investment directly tied towards local manufacturing.”
Still, some might be left susceptible. Multinational drugmakers have stated they primarily rely on crops within the US to provide the home market, however not all of them have damaged floor on their promised expansions.
“The countries most exposed to the move are Singapore and Switzerland. The UK also has some important pharmaceuticals exports to the US – its trade agreement with the US mentioned that special rates would be considered in the event of new Section 232 tariff, but no formal rate was agreed. A similar approach seems also to be in place for Japan,” says Bloomberg’s Nicole Gorton-Caratelli and Maeva Cousin.
Several of America’s best-selling drugs are still largely produced abroad. The main ingredient in Novo Nordisk’s diabetes and weight-loss juggernauts Ozempic and Wegovy is made in Denmark, while a critical first step in the production of Mounjaro, Eli Lilly & Co.’s rival GLP-1, happens in Ireland.
Johnson & Johnson’s immune-disease therapy Stelara and cancer drug Darzalex are manufactured in Switzerland and Denmark, respectively. Opdivo, Bristol-Myers Squibb Co.’ blockbuster cancer immunotherapy, relies heavily on production in Ireland and Switzerland. Novartis AG’s Cosentyx and Entresto also originate in Swiss facilities.
Unless those companies can show they’ve broken ground on US sites that will take on production, their biggest sellers could face tariffs that would instantly double import costs. Novo Nordisk, for example, is building a new 1.4 million square foot manufacturing plant in North Carolina, while Eli Lilly earlier this year announced plans for four new US manufacturing sites.
Some Japanese pharmaceutical companies also make drugs for rare and serious conditions that might be subject to the new tariff. Hemlibra, used to help clot blood in hemophilia patients, is made by Japanese drugmaker Chugai Pharmaceutical Co, while Enhertu, used to deliver chemotherapy directly to breast cancer cells without damaging healthy ones, is made by Daiichi Sankyo Co.
Trump is imposing product-based levies using Section 232 of the Trade Expansion Act, which allows the administration to impose tariffs without congressional action if imports are deemed a national security threat. The approach has already been used to impose levies on automobile, copper, steel and aluminum imports.
Other duties on critical imports, including semiconductors and critical minerals, are expected in the coming weeks. His government has also launched investigations into imports of robotics, industrial machinery and medical devices that could have wide-ranging effects for domestic manufacturers.
The Trump administration is also weighing a plan to reduce US reliance on overseas semiconductor manufacturing, the Wall Street Journal reported Friday, citing people familiar with the matter. It will aim to have companies make the same number of chips in the US as they do overseas, the people said, adding that Commerce Secretary Howard Lutnick had spoken to some corporate executives about the matter.
In April, the Commerce Department 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.
Trump has previewed his move on pharmaceutical tariffs for months, albeit in haphazard fashion. In early July, 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% on their products. Then, on July 15, the president said he was likely to begin imposing tariffs on pharmaceuticals by the end of the month.
If the new tariffs don’t stack on top of existing country deals, their impact will be limited as several major foreign production economies have reached trade deals with the White House. For example, in late July, the US and EU reached a broad trade agreement that includes 15 percent tariffs on pharmaceutical products.
The industry-based tariffs offer potentially more durability than the country-level levies Trump imposed under the International Emergency Economic Powers Act. The Supreme Court has agreed to consider a challenge to those tariffs, after two lower courts have already declared them illegal.
Trump has also targeted the drug industry in other ways. The tariff announcement follows an executive order that attempts to reduce prices by aligning American drug costs with the lowest prices paid abroad. The order, which Trump signed May 12, asks companies to cut prices voluntarily or face regulatory measures, though it’s unclear how exactly that will be enacted.
The president announced his tariff plan days ahead of a White House-imposed deadline for 17 of the biggest drug manufacturers to voluntarily reduce what they charge the US government for approved medicines and set the price of new drugs on par with what they cost overseas. In a July letter to company CEOs, Trump threatened to “deploy every tool in our arsenal” to punish corporations that don’t comply by Monday.
“This refreshed threat on pharma has been brought up by Trump several times as a negotiation tool,” said Anna Wu, cross-asset strategist at VanEck Associates Corp. in Sydney.
By Jennifer A. Dlouhy, Lauren Dezenski, and Madison Muller.
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