[CTC] Trump’s pharma tariffs are a partial reprieve

Mon Sep 29 07:09:13 PDT 2025

*Politico Morning Trade*
Sept. 29, 2025

Trump’s pharma tariffs are a partial reprieve

*— President Donald Trump’s latest onslaught of sector-based tariffs* cut a
few surprise breaks for the pharmaceutical industry.

*PHARMA FINE PRINT: *Trump's plan to impose a 100 percent tariff on
pharmaceutical imports sparked warnings
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 from lawmakers and industry groups about soaring costs and disrupted
access to critical medicines.

But as details emerge ahead of the policy's expected rollout Wednesday,
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 most drugmakers and consumers seem poised to sidestep the tariff’s
harshest impacts.

For instance, the 100 percent duty won’t apply to companies building plants
in the U.S., including those "breaking ground" or already under
construction, Trump wrote in the first
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 of a series of Truth Social posts last week outlining new sector-based
tariffs.

The triple-digit pharma duties also won’t hit generic drug imports,
which account
for the vast majority
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 of prescriptions filled in the U.S., a White House official, granted
anonymity to discuss policies that are not yet final, told Morning Trade.

*Lucky break? *In addition, both the European Union and Japan face lower 15
percent tariff rates on pharma products, consistent with the terms of the
updated frameworks they signed with Washington earlier this year. The
official clarified that the White House will “of course” honor commitments
to cap sector-specific tariff rates at the levels agreed to during
negotiations.

*Not so fast: *Countries that haven’t specified new rates for
pharmaceuticals, such as the United Kingdom, face 100 percent tariffs, the
official said. London was the first partner to notch an updated trade
framework with Washington in May, but the governments left negotiations
over tariffs on pharma and other sectors unresolved.

“This may not be as dramatic in practice as it looks,” Peter Harrell, an
economic adviser for former President Joe Biden told Morning Trade. “If
Trump plans to honor his trade deal commitments, we're going to be
importing most on-patent pharmaceuticals at a 15 percent rate, and only a
minority of them are going to be exposed to this 100 percent tariff."

*By the numbers: *The 27-member EU accounted for about 60 percent of all
U.S. pharma imports in 2024, marking the bloc as a primary source for the
products, according to the United Nations Comtrade Database.
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An exception is Switzerland, a “big loser” under Trump's policy, Harrell
pointed out. The country is a key hub of pharmaceuticals for the U.S., but
is not part of the EU.

*Why now: *The partial reprieve comes amid intense pressure from lawmakers,
including 20 Ways and Means Republicans who sent the administration a letter
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 asking them to avoid broad pharmaceutical tariffs, citing the risk of
shortages
and price hikes
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.

Meanwhile, industry groups representing companies in medical and industrial
sectors are still urging the administration to proceed with caution.

“The immediacy of punitive, 100% tariffs on innovative medicines for any
company without ‘shovels in the ground’ would devastate our nation’s small
and mid-sized biotechnology companies,” wrote John Crowley, president and
CEO of the Biotechnology Innovation Organization, which represents biotech
firms, in a statement posted Friday
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.

“These 3,000+ companies are the heart and soul of America’s vitally
important biotechnology industry,” he added. "Most of these companies do
not have access to the significant capital needed to immediately establish
manufacturing in the US.”

*Reminder: *The White House has not released new details about the national
security investigation into pharma imports since it launched in April
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 under Section 232 of the Trade Expansion Act of 1962.
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