President Donald Trump’s administration has launched a new offensive in the global trade war by signing an executive order that imposes new US drug tariffs on imported patented medicines and their components. After the Supreme Court overturned previous large-scale tariffs, the White House invoked Section 232 of the Trade Expansion Act of 1962, citing national security concerns. The order, signed in early April 2026, establishes trade barriers for pharmaceutical imports and updates existing tariffs on metallurgical products.
U.S. Reliance on Pharmaceutical Imports
The official presidential proclamation included Food and Drug Administration (FDA) statistics justifying the measures. Washington currently views the high volume of imports as a threat to the economy and national defense. According to the document, 53% of all patented medicines on the American market are produced abroad. The situation regarding active pharmaceutical ingredients (APIs) is more pronounced, with only 15% of the required volume manufactured within the United States.
The Trump Order: US Drug Tariffs and Reshoring
To force manufacturing back to the U.S., a process known as pharmaceutical reshoring, the decree introduces a tiered tariff system and strict deadlines for businesses:
- 0% Guarantee: Companies that sign a price-reduction agreement and a plan to move factories to the U.S. will receive a zero-rate tariff. This rate is legally fixed until January 20, 2029.
- 100% Deadline: Companies building factories but without a price agreement will face an initial 20% tariff. These firms must complete reshoring within four years. If they fail to meet this commitment, the rate will automatically increase to 100% on April 2, 2030.
- Retroactive Penalties: Reshoring plans must be confirmed by external audits. If the U.S. government determines a company is engaged in “fictitious” construction, the Department of Commerce can apply 100% tariffs retroactively for the entire import period.
The new customs tariffs will be implemented in two stages. They will apply to companies on a restricted list starting July 31, 2026. For all other global market participants, the tariffs take effect on September 29, 2026.
Exemptions: Generics and Essential Medications
The protective tariffs apply exclusively to innovative patented drugs. Mass-market generics and biosimilars are currently exempt and will maintain a zero-rate tariff to prevent price increases for basic medications.
The document also lists several medical exemptions regardless of the country of origin. The zero-rate applies to orphan drugs for rare diseases, cell and gene therapies, infertility treatments, plasma-based therapies, and nuclear medicine. Antibody-drug conjugates for oncology, protections against chemical or biological threats, and veterinary medicines are also exempt.
Conditions for Allies and Metal Tariffs
Specific quotas apply to key political allies. A 15% tariff limit has been set for the European Union, Japan, South Korea, and Switzerland. The tariff for the United Kingdom will be 10%, with the possibility of a future reduction to zero.
Beyond pharmaceuticals, the order imposes 50% tariffs on imported steel, aluminum, and copper. This rate will now be calculated based on the “full customs value” of the finished product rather than just the raw material share. If a foreign appliance, such as a washing machine, is primarily made of steel, the cost of importing it will increase significantly.
Impact on EU Business and Consumers
For European corporations, the decree threatens financial losses and disrupted logistics. EU pharmaceutical giants must choose between losing profits due to the 15% tariff or investing billions to build American factories.
To offset losses in the U.S. market, European firms may seek new revenue sources. This could lead to higher prices for new patented drugs within the EU market, potentially increasing consumer inflation.
Impact on U.S. Business and Consumers
While Trump has promised to lower drug prices through corporate agreements, import tariffs typically increase the cost of goods. Moving factories to the U.S., where labor is more expensive, will also raise costs. Consequently, Americans may face price increases for foreign medications as well as appliances manufactured with imported metals.
The trade war will impact consumers on both sides of the Atlantic, according to recent reports.
