The White House is preparing a steep escalation of tariffs on imported pharmaceuticals, a move that could reshape global sourcing strategies and add cost pressure to U.S. healthcare supply chains. President Donald Trump said Tuesday the measures will start with a “small tariff” before climbing to 150% within 18 months and peaking at 250%, a pace he described as necessary to bring more drug production back onshore. Semiconductor imports are also in line for new duties, with details expected in the coming week.
National Security Review Sets Stage for Tariff Action
The planned pharmaceutical duties follow a Section 232 national security probe launched in April, the same trade mechanism previously used to levy tariffs on steel, aluminum, and copper. The administration has argued that reliance on foreign drug production creates strategic vulnerabilities, a concern magnified during the COVID-19 pandemic when critical medicines faced shortages. While Trump did not specify the initial tariff rate, he previously floated starting points between 25% and 200%.
Several drugmakers have been preemptively bolstering U.S. manufacturing in anticipation of trade action. AstraZeneca recently committed $50 billion to expand its U.S. footprint, joining a roster of pharmaceutical firms announcing multibillion-dollar domestic investments since the review began. Industry group PhRMA has yet to publicly comment on the latest tariff timeline.
Global Trade Rules May Limit Tariff Ambitions
A framework agreement with the European Union currently caps reciprocal tariffs on pharmaceuticals and semiconductors at 15%, but that ceiling applies only if duties are tied to the ongoing import investigation. If Washington frames the measures strictly as national security actions, it could test the limits of that agreement and invite retaliatory measures. Analysts warn that any large-scale realignment of drug supply chains could take years, given the sector’s heavy dependence on active pharmaceutical ingredient production in India and China.
Beyond Tariffs: The Real Cost Question
If the administration’s goal is rapid reshoring, tariffs alone may not be the decisive lever. Building resilient U.S. drug manufacturing will depend on incentives for advanced production technologies, streamlined regulatory approvals, and workforce readiness, areas where policy support has lagged. Without parallel investment, companies may absorb tariff costs rather than overhaul supply networks, leaving the underlying dependency intact.