Tariff escalation targets overseas pharmaceutical production
President Donald Trump announced Tuesday that the U.S. may impose tariffs as high as 250% on pharmaceutical imports within the next 18 months. Speaking on CNBC’s “Squawk Box,” Trump stated the measure would begin with a “small tariff” before ramping up to 150%, and eventually 250%, as part of an aggressive plan to bring drug manufacturing back to the United States.
The proposal, if enacted, would represent one of the highest tariff rates threatened during Trump’s presidency. While similar threats have been made and later adjusted, this move marks an intensifying focus on reshaping the pharmaceutical supply chain.
National security and industry pressure
The tariffs are linked to a Section 232 investigation launched in April, which allows the Department of Commerce to examine whether foreign imports of pharmaceuticals pose a risk to national security. Trump argues the reliance on foreign-made drugs weakens the country’s emergency readiness and undermines long-term healthcare independence.
“We want pharmaceuticals made in our country,” Trump said, citing the declining number of U.S.-based drug manufacturing facilities. In response, companies like Eli Lilly and Johnson & Johnson have announced domestic investments, aiming to align with the administration’s priorities and potentially avoid penalties.
Industry backlash and supply chain risks
Drugmakers have voiced concern that the proposed tariffs could disrupt supply chains and lead to increased prices for consumers. Industry representatives warn that higher import costs may reduce research investments and even trigger shortages for critical medications, particularly those sourced from overseas suppliers.
These tariffs come on top of the administration’s broader drug pricing agenda. Earlier this year, Trump revived the “most favored nation” policy via executive order, which aims to tie U.S. drug prices to those offered in other developed nations. Although the order hasn’t been formally enacted, Trump reiterated Tuesday that the policy would significantly reduce prices once in effect.
Pressure campaign on drugmakers intensifies
In a further push to force lower prices, Trump sent letters last week to 17 pharmaceutical companies, urging them to take action by September 29. The letters call for firms to offer all their drugs to Medicaid patients at the lowest international price and to outline clear commitments for domestic pricing reforms.
Some companies have acknowledged receipt of the letters and are reviewing them, but have not yet issued public responses. The pharmaceutical sector remains on alert as the administration escalates efforts to overhaul the pricing and production landscape, with potential consequences for both global operations and U.S. patients.
