Already late with carrying out his administration's prior threats around pharmaceutical tariffs, President Donald Trump has again renewed his pledge of quickly imposing drug levies.
During a cabinet meeting on Tuesday, the President raised the prospect of slapping tariffs as high as 200% on foreign-made pharmaceutical products. In addition, he said he plans to give manufacturers at least a year to move their operations to the U.S.
“We’re going to give people about a year, a year and a half, to come in,” Trump said, as quoted by Bloomberg. “And after that they’re going to be tariffed if they have to bring the pharmaceuticals into the country, the drugs and other things, into the country. They’re going to be tariffed at a very, very high rate, like 200%. We’ll give them a certain period of time to get their act together.”
Neither the 200% number nor the phased approach is a new concept. Share prices for large pharma companies remained largely unchanged following Trump’s latest proclamation.
During a March meeting with Ireland’s leader Micheál Martin, Trump floated the 200% import tax rate while lamenting how the European country has lured U.S. pharma companies away with a low corporate tax rate.
“When the pharmaceutical companies started to go to Ireland, I would have said, that’s OK, if you want to go to Ireland. I think that’s great,” Trump said at the time. “But if you want to sell anything into the United States, I’m going to put a 200% tariff on you so you’re never going to be able to sell anything into the United States.”
Ireland represents the biggest exporter of pharmaceutical products to the U.S. by monetary value. In 2024, about $50 billion U.S. pharma imports came from Ireland, versus $12 billion from India and $8 billion from China, according to an analysis of U.S. Census Bureau data by The Wall Street Journal.
As for the possible grace period, the President has floated that idea before, too. During an “invest in America” rally back in April, Trump suggested that he would give biopharma companies some time before erecting a “tariff wall.”
“We are going to be getting tremendous amounts of drug and pharmaceutical companies going to be pouring into the country … We’re going to give them a lot of time to do it,” he said at the time, as quoted by The Guardian.
“But after that, it’s going to be a tariff wall put up, and they won’t be happy about it, but they’ll be happy if they start building right now,” Trump added. “After a certain period of time, it’s going to get tougher, tougher, tougher, and then it’s going to be real hard to do business in this country.”
The exact timing of pharma tariffs—or the beginning of the grace period countdown—remains unclear. Details on pharmaceutical tariffs “will come at the end of the month,” Commerce Secretary Howard Lutnick told CNBC this week.
Lutnick said his department will complete what’s known as a Section 232 investigation into whether pharmaceutical imports pose a threat to U.S. national security at the end of the month. Results from the probe could guide and justify any tariff actions that the administration may take.
When signing an executive order on May 5 directing the FDA to reduce regulatory hurdles for domestic drug manufacturers, Trump told reporters he would announce pharmaceutical-specific tariffs in the next two weeks. Before that, Lutnick said in April that these policies would come “in the next month or two.”
Last month, during a return trip from the G7 meeting in Canada, Trump told reporters aboard Air Force One that trade duties on pharmaceuticals would come “very soon.”
The President’s latest announcement is “positive for the biopharma sector, because tariffs will not be implemented immediately … and it is unclear if the administration will follow through in the future,” Leerink Partners analysts wrote in a Tuesday note.