Trump announces new drug tariffs, trucks and furniture duties
President Donald Trump has announced 100% tariffs on branded drugs and new duties on trucks, furniture and cabinets.
President Donald Trump has announced a new tariff that will impose a 100% obligation on brand-name drugs imported into the United States from October 2025.
There is a major exemption for drug tariffs under brand names. Pharmaceutical companies already violated by building US manufacturing plants will be exempted, Trump said.
Tariffs do not apply to countries that have already negotiated trade transactions, such as Japan or European Union countries.
“From October 1, 2025, we will impose 100% tariffs on branded or patented drugs unless a company is building a drug manufacturing plant in the United States,” Trump said in a September 25 social media post.
Here’s how this will affect your wallet:
How much do you pay for customs duties?
Approximately 90% of prescriptions that Americans fill in at pharmacies or mail orders are common drugs. Trump’s tariff announcement specified a brand name or a patented drug. This could mean that generics will be exempt from this round of duty.
Branded drugs are protected by patents, allowing pharmaceutical companies to sell their drugs only without direct competition. Pharmaceutical companies have no limits when setting prices for branded drugs, but the amounts that consumers pay depends on negotiations with insurance companies and pharmacies’ profit managers. Insurance plan requirements such as out-of-payment and deductions – how much the consumer has to pay before coverage – also affects the amount you pay.
Once a drug is subject to patent protection, generic manufacturers can manufacture and sell similar versions of branded drugs.
However, drug pricing is a complex formula that is often shaped by a mix of government rebate policies, drug pricing intermediaries, insurance companies and drug shareholder requirements.
“The US prices are both authentic and fake at the same time,” said Antonio Chiatia, CEO of 46 Blue Clin and drug pricing expert. “There’s this inherent fluff that’s fixed under the prices of the US system.”
If a pharmaceutical company evaluates 100% tariffs, some could accelerate prices due to federal rebate requirements. Federal law, enacted in 2024, required Medicaid to pay a fine or rebate if pharmaceutical companies raise prices above inflation.
If drugmakers have to pay 100% tariffs — on top of a steeper Medicaid rebate — it can send even higher drug prices, Ciaccia said.
“You’ll have to put your feet on gas that is even higher price increases than you would if you weren’t,” Ciaccia said.
How are drug manufacturers responding to new tariffs?
American pharmaceutical research and manufacturers, representing pharmaceutical companies, said more than half of the ingredients used in drugs consumed in the US are manufactured in the US.
Major pharmaceutical companies such as Astrazeneca, Eli Lilly and Roche have announced new major domestic pharmaceutical manufacturing facilities in the United States.
“Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or future treatments or developments of treatments or treatments, so risk these plans,” said Alex Schliver, senior vice president at PHRMA. “Drugs have historically been exempt from tariffs, because they can raise costs and lead to shortages.”
The accessible drug association representing generic drug makers is waiting for details beyond the president’s social media posts, spokesman Brian Hart said.
Generic drugmakers have been primarily exempt from tariffs negotiated in previous trade transactions. However, the industry may be affected by tariffs on pharmaceutical equipment and delivery devices such as IV bags and inhalers. Aluminum duties can also affect general drug manufacturers, as many pill products have foil packaging.
Contribution: Reuters
