President Donald Trump has announced another wave of import taxes, including 100% on pharmaceutical drugs, to start on October 1st.
Posting to his Truth Social platform on Friday last week, the President announced that brand-name or patented pharmaceutical products will be subject to a 100% tariff, unless the drugmaker is building a manufacturing plant in the US.
He has been promising for months to levy tariffs on pharmaceutical imports, which managed to avoid tariffs during his first term.
The president has previously voiced his confidence that tariffs will pressure drug manufacturers to ramp up production in the US and, therefore, strengthen the supply chain for essential medicines.
However, the additional tariffs risk intensifying inflation that is already elevated, as well as slowing economic growth, as employers getting used to Mr Trump’s previous import taxes grapple with new levels of uncertainty.
Mr Trump said on Truth Social that the pharmaceutical tariffs would not apply to companies that are building manufacturing plants in the US, which he defined as either “breaking ground” or being “under construction”.
It was unclear how the tariffs would apply to companies that already have factories in the US.
Several pharmaceutical companies have responded to Trump’s tariff threats by announcing plans to invest hundreds of billions of dollars in building or expanding US manufacturing facilities in the coming years.
Just this week Eli Lilly announced it would construct a $6.5bn manufacturing facility in Houston, shortly after saying it would build a $5bn plant outside of Richmond, Virginia.