- US President Trump unveiled phased tariffs on imported generic medicines.
- Tariffs start zero, rising to 200% by 2028.
- Goal is reshoring US generic drug manufacturing, impacting India.
US President Donald Trump has announced a phased tariff plan for generic medicines imported into the United States, under which imports will continue to face zero tariffs for the next two years before duties are raised sharply to as much as 200 per cent by August 2028.
According to Reuters, generic drugs entering the US will continue to attract a 0 per cent tariff for two years beginning August 1. The tariff will then increase to 100 per cent for one year before rising further to 200 per cent.
Trump said the move is intended to encourage pharmaceutical companies to shift manufacturing operations to the United States.
“This is done in order to RESHORE Generic Pharmaceutical Production into America, with a penalty to those Companies that decide not to build Plant and Equipment within the stated period of time given to them,” Trump wrote on Truth Social.
Tariff Plan Aims To Boost Domestic Manufacturing
The latest announcement forms part of Trump’s broader strategy to increase pharmaceutical manufacturing within the United States.
The US President has been pressing drug manufacturers to lower medicine prices through his most-favoured-nation drug pricing policy, which seeks to align US drug prices with those paid in other high-income countries.
According to the US Food and Drug Administration (FDA), generic medicines account for more than 90 per cent of all medicines sold in the United States.
Trump clarified that the latest tariff proposal applies only to generic medicines. The existing policy covering patented, branded and innovative drugs will remain unchanged.
India Could Be Closely Watched
The proposal is significant for India, one of the largest suppliers of generic medicines to the American market.
According to The Financial Express, India is the leading exporter of finished generic medicines, also known as formulated dosage forms, to the United States. Industry estimates based on US FDA and trade data suggest that Indian pharmaceutical companies account for around 40 to 50 per cent of generic prescriptions dispensed in the country.
China, meanwhile, continues to play a key role in the pharmaceutical supply chain as the world’s largest producer of active pharmaceutical ingredients (APIs), which are used to manufacture medicines.
While the proposed tariff structure provides a two-year window before duties begin, it could have implications for Indian drug manufacturers that rely heavily on exports to the US.
Also Read : Tariffs, West Asia War Terror Strike Dalal Street: Sensex Tanks 400 Points, Nifty Tests 24,100
Branded Drug Policy Remains Separate
The announcement follows earlier measures targeting branded pharmaceutical products.
Trump signed an executive order in April imposing 100 per cent tariffs on branded pharmaceutical imports unless manufacturers either agreed to government-backed drug pricing arrangements or committed to producing medicines within the United States.
Separately, several of the world’s largest pharmaceutical companies reached agreements with the US government last year that exempted billions of dollars worth of medicines from tariffs.
The latest proposal leaves those arrangements and the policy governing patented medicines unchanged.
Part Of Wider US Trade Strategy
The announcement comes as the Trump administration prepares another round of tariff measures covering imports from multiple countries.
The temporary 10 per cent global tariff imposed by the administration is due to expire on Friday, with Washington expected to announce fresh duties on dozens of countries.
The report said the new tariffs are likely to be broadly similar to the existing 10 per cent duties, although the administration is also exploring legal options that could allow higher tariffs.
The Trump administration is also pursuing trade action under Section 301 of the Trade Act over concerns related to forced labour. These efforts follow a US Supreme Court ruling that struck down Trump’s temporary global tariff framework earlier this year, prompting the administration to explore alternative legal mechanisms for imposing tariffs.
Brazil has already been affected by the latest trade measures, with some of its exports facing tariffs of 25 per cent.
Also Read : Volkswagen In Advanced Talks With JSW For India Partnership: Report
