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U.S. Enacts Tariffs on Pharmaceutical Imports, Targeting EU, India, and China

The Trump administration's decision to impose tariffs of up to 34% on pharmaceutical imports ends a decades-long exemption, creating uncertainty for global drugmakers and raising concerns about consumer costs.

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Overview

  • The U.S. has officially imposed tariffs of 20% on pharmaceutical imports from the EU, 26% from India, and 34% from China, breaking the industry's exemption under a 1994 WTO agreement.
  • Pharmaceutical companies are lobbying for a phased implementation to minimize immediate financial disruption and allow time for potential manufacturing relocation to the U.S.
  • The tariffs are expected to disproportionately impact generic drug manufacturers and active pharmaceutical ingredient (API) suppliers, particularly in Asia, due to their thinner profit margins.
  • Ireland and Denmark, key pharmaceutical export hubs, face significant economic risks, with Ireland exporting over $50 billion in pharmaceuticals to the U.S. last year.
  • Major pharmaceutical firms, including Novo Nordisk and Merck, are assessing strategies to adapt to the new trade environment, while governments engage in discussions to mitigate the fallout.