Trump prepares pharmaceutical tariffs of up to 100%

The Trump administration recently announced new tariffs on branded drugs from pharmaceutical companies that have not agreed to lower their U.S. drug prices. These tariffs, which target patented medications and their active ingredients, are part of the administration’s efforts to protect the domestic drug supply. Companies that plan to onshore production may face a 20% tariff initially, increasing to 100% over time.

In addition to the pharmaceutical tariffs, the administration also made changes to how tariffs are calculated on imported raw materials made from steel, aluminum, and copper. The goal is to ensure that foreign sellers do not undervalue their products to avoid paying tariffs. Imported finished products containing more than 15% of these metals will now be subject to a 25% tariff on the total value of the item.

The plan exempts certain specialty pharmaceutical products, genetic products, biosimilars, and related ingredients from tariffs for now. However, these exemptions will be reassessed in the future. The administration expects more companies to announce reshoring plans before the tariff rates go into full effect.

Overall, these sector-specific tariffs represent a shift in Trump’s trade strategy and aim to address national security concerns related to certain pharmaceutical imports. The administration has already secured commitments from major drugmakers to lower prices and reshore manufacturing, signaling a new era in the pharmaceutical industry.

This article was contributed by CNBC’s Megan Cassella.