US to Impose Up to 100% Tariffs on Patented Drug Imports, Citing Security Risks

Washington, April 2026 : Donald Trump has announced sweeping tariffs of up to 100 per cent on imported patented pharmaceuticals, citing national security concerns and the United States’ growing dependence on foreign supply chains for critical medicines.

In a formal proclamation issued on Thursday, Trump stated that pharmaceutical products and their key ingredients are being imported “in such quantities and under such circumstances” that they threaten to impair national security. The move targets patented drugs as well as active pharmaceutical ingredients (APIs), which are essential for producing a wide range of medicines used in both civilian healthcare and military systems.

The administration warned that excessive reliance on overseas manufacturing could disrupt access to life-saving medications during geopolitical tensions, economic instability, or global crises. Officials emphasised that ensuring domestic production capacity is crucial for maintaining healthcare resilience and national preparedness.

Under the new framework, most imported patented drugs will face a steep 100 per cent ad valorem tariff. However, companies that commit to relocating or expanding manufacturing operations within the United States will be offered temporary relief. Such firms will initially face a reduced tariff of 20 per cent, which will gradually increase to 100 per cent over a four-year period if production is not fully localised.

The policy also introduces differentiated tariff rates for key US allies. Imports from regions such as the European Union, Japan, South Korea and Switzerland will attract relatively lower duties of around 15 per cent, reflecting existing trade relationships and regulatory alignment. Additionally, certain specialised categories—including orphan drugs, nuclear medicines, and advanced gene therapies—have been exempted from the tariff regime due to their limited availability and critical medical importance.

Notably, generic drugs and biosimilars have been excluded from the new tariffs for the time being. The proclamation clarified that these essential and widely used medicines will remain unaffected “at this time,” though officials did not rule out future policy changes.

US Trade Representative Jamieson Greer said the initiative is part of a broader strategy aimed at rebuilding domestic pharmaceutical manufacturing and securing long-term supply chains. He highlighted that the administration is actively engaging with companies and international partners to encourage investment in US-based production facilities.

“It’s less about the tariff level and more about ensuring that supply chains are secure and rooted in America,” Greer said, adding that several companies have already begun investing in infrastructure, with new pharmaceutical plants under construction.

The tariffs will be rolled out in phases starting July 31, 2026, with some flexibility for companies operating under existing agreements. Analysts expect the decision to have significant implications for global pharmaceutical trade, particularly for major exporters.

Countries like India and China, which play a dominant role in the production of generic medicines and APIs, could face indirect effects if the scope of tariffs expands in the future. Although generics are currently exempt, any changes could influence global pricing dynamics and supply stability.

The move has been enacted under Section 232 of the Trade Expansion Act, a provision that allows the US government to restrict imports deemed a threat to national security. Previously used for steel and aluminium tariffs, its extension to pharmaceuticals marks a major escalation in Washington’s trade and industrial policy, signalling a shift toward greater economic self-reliance in strategic sectors.