Trump Considers Imposing Brisk 200% Tariffs on Imported Drugs

Taking a daredevil move that may disturb the pharmaceutical sector, former President Donald Trump on Tuesday indicated his plans to charge up to 200% tariffs on drugs shipped into the United States.

“They’re going to be tariffs at a very high rate, like 200%,” Trump said during a Cabinet meeting, though he noted the policy wouldn't be enforced immediately. “We’ll give them about a year, year and a half,” he added, suggesting a grace period for drugmakers to relocate manufacturing back to the U.S.

Commerce Secretary Howard Lutnick afterwards also confirmed that additional information on the proposed pharmaceutical tariffs would be available towards the end of the month. "Pharmaceuticals and semiconductors, those studies will be finished at the end of the month, and then the president will make his policy decision," Lutnick said in an interview with CNBC.

While Trump has had a history of issuing combative tariff threats without follow-through, the sector is paying attention. Pharmaceutical equities moved little after his comments, indicating some investor doubts regarding prompt implementation.

Analysts also were pessimistic. In a Tuesday note, Leerink Partners' David Risinger said the news could be taken as a positive in the near term. "Tariffs will not be imposed overnight… and it is still uncertain whether the administration will move forward," he wrote.

This is Trump's most important statement about drug-specific tariffs since April, when his administration opened a Section 232 investigation of pharmaceutical imports — a national security tool that empowers the Commerce Department to determine the effect of foreign products.

If passed, the tariffs would be a blow to pharmaceutical firms that have been threatening the consequences for years. Industry executives say that such tariffs would increase the cost of drugs, discourage domestic investment, and interfere with vital supply chains — ultimately putting patient care in jeopardy.

Although Trump contends that high tariffs will force drug companies to bring back the manufacture on American soil, pharmaceutical giants such as Eli Lilly, Johnson & Johnson, and AbbVie already started boosting their U.S. investments following decades of offshoring.

Nevertheless, the sector's biggest lobby group, PhRMA, is still against it. "Each dollar diverted to tariffs is a dollar that can't be invested in American manufacturing or creating new medicines," PhRMA senior vice president of public affairs Alex Schriver said.

The industry shares President Trump's vision of restoring U.S. manufacturing and has already committed hundreds of billions in investment," Schriver went on. "But imposing tariffs on medicines would be self-defeating, particularly since they've long been exempted because they are so essential.