In a new tariff policy, US President Donald Trump has announced a two-year grace period for foreign pharmaceutical companies to set up shop in the US before imposing steep import duties on generic medicines.
Imports of generic drugs will be exempt from tariffs for two years beginning August 1, 2026, as per the policy. Trump announced the tariff increases on social media, saying that imports will be subject to a 100% tariff for one year and then a 200% tariff.
According to Trump, the goal is to boost domestic production and decrease dependence on imported medications by encouraging pharmaceutical companies to move manufacturing to the US. Companies are encouraged to invest in American manufacturing facilities by the tariff structure, he said.
Nevertheless, it remains unclear from the announcement if businesses that start building factories during the transition period will be eligible for exemptions or if production needs to be operational prior to the implementation of higher tariffs. Not a single nation or pharmaceutical firm was singled out.
In addition, Trump made it clear that the new tariff schedule is solely for generic medications; the policy for patented, branded, and innovative pharmaceuticals will not change. The number of pharmaceutical factories in the US is growing at a rapid pace, he said.
With the administration’s goal of increasing domestic drug production being advanced, global generic drug makers have little time to adjust to the new US pharmaceutical trade policy, which is marked by a phased tariff strategy.
Image: TIME
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