Pharmaceutical tariffs: Trump readies up to 100% duty on some imports

A draft order prepared within the Trump administration would impose up to 100% tariffs on imports of certain patented medicines and their active pharmaceutical ingredients, according to media reports and a draft viewed by reporters. Officials may announce the measure soon, though timing and details could change.

The policy relies on authority under the Trade Expansion Act’s Section 232, which allows investigation of imports when they are deemed to affect national security. The draft reportedly includes exemption pathways for companies that commit to building domestic manufacturing facilities and for firms that reach specific pricing agreements with the administration, giving affected manufacturers a window to negotiate. Bloomberg and legal analysts have set out these potential carve-outs.

Market reactions were immediate but mixed: major pharma equities showed intraday volatility after initial reports, and analysts warned that very high ad valorem tariffs could push up end-user prices or shift supply chains. Industry groups cautioned that steep duties might reduce investment for innovation and complicate procurement for hospitals and insurers, while also accelerating companies’ plans to expand U.S. production.

Contextually, the proposal is part of a broader trade and industrial policy push aimed at re-shoring critical manufacturing and reducing reliance on foreign suppliers, a theme that has been pursued through multiple tariff investigations and executive actions since 2025. The use of Section 232 in the pharmaceutical sector marks a notable extension of national security rationale into health-related supply chains, and it raises questions for trading partners and global API suppliers.

Analysts say outcomes will hinge on which products are designated, the scope of exemptions, and the administration’s willingness to pursue negotiated settlements with manufacturers. In the near term, investors should expect heightened volatility in pharma stocks and potentially higher costs for selected medicines; over the medium term, the most likely scenarios involve a mix of negotiated price commitments, incremental reshoring of certain production lines, and continued legal and political challenges. Market participants will closely track any formal proclamation and Commerce Department findings to refine forecasts.