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Donald Trump pharmaceutical tariffs: US President Donald Trump on Friday announced that his administration will impose a 100 per cent tariff on branded and patented pharmaceutical products beginning October 1, 2025, unless the manufacturing companies are building production facilities in the United States.

In a post on Truth Social, President Trump wrote, "Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. 'IS BUILDING' will be defined as 'breaking ground' and/or 'under construction."

Which companies will be exempted from 100 per cent tariffs?

Clarifying the scope of the measure, Trump added that companies that have already begun construction of plants in the US will be exempt from the new tariff. "There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!" the post read. It was unclear how the tariffs would apply to companies that already have factories in the US.

Indian pharma sector to hit badly

India's pharmaceutical exports to the United States reached $8.953 billion in FY25, a 14.2 per cent increase from the previous year. According to official trade data, the US remains a key market for Indian pharma exports, accounting for more than one-third of the country's total pharma exports. In FY25, India's overall pharma exports surpassed $30 billion, with the US, UK, Brazil, France, and South Africa being the top destinations.

How Trump's tariff will affect its own citizens

The tariffs are another dose of uncertainty for the US economy with a solid stock market but a weakening outlook for jobs and elevated inflation. These new taxes on imports could pass through to consumers in the form of higher prices and dampen hiring, a process that economic data suggests is already underway.

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These new taxes on imports could pass through to consumers in the form of higher prices and dampen hiring, a process that economic data suggests is already underway. "We have begun to see goods prices showing through into higher inflation," Federal Reserve Chair Jerome Powell warned in a recent news conference, adding that higher costs for goods account for "most" or potentially "all" of the increase in inflation levels this year.

In 2024, America imported nearly USD 233 billion in pharmaceutical and medicinal products, according to the Census Bureau. The prospect of prices doubling for some medicines could send shock waves health care expenses, as well as the costs of Medicare and Medicaid, potentially increase.

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The pharmaceutical drug announcement was shocking as Trump has previously suggested that tariffs would be phased in over time so that companies had time to build factories and relocate production.