On September 25, Trump announced that almost all pharmaceutical products will be subject to a 100% tariff unless the company making them redirects some of its manufacturing back to the United States.
Several pharmaceutical companies have given in already, with Eli Lilly announcing a $6.5 billion dollar plant in Houston, Texas, right after declaring a $5 billion plant near Richmond, Virginia. However, a Mizuho analyst, Jared Holz, found Trump’s threat to be less than convincing, as almost all major pharmaceutical companies have domestic production in the United States. They also have construction projects within the United States in progress.
The tariffs are unlikely to have a significant effect; the European Union, which is the most reliant bloc on pharmaceutical exports to the United States, already agreed to a 15% cap on all goods, which the White House claimed it will honor. Japan also enjoys a 15% cap. Trump has also not imposed tariffs on generic pharmaceutical imports, which would have a more severe effect; India alone supplies 47% of the required pharmaceutical goods to the United States.
Regardless, tariffs alone will not restore American self-sufficiency as far as medicine is concerned. It also remains to be seen if this new round of tariffs are legal.
