Pharmaceutical companies face 100% tariff unless they build US plants, Trump says

US President Donald Trump has announced that imported brand-name drugs or patented pharmaceutical products will face a 100% tariff starting October 1, 2025.

The announcement is made to pressurize drug manufacturers to build their production plants in the United States.

While posting on Truth Social, Trump clarified that “there will, therefore, be no Tariff on these pharmaceutical products if construction has started.”

In addition to patented drugs, this wave of tariffs included a 50% charge on kitchen cabinets, 30% on upholstered furniture, and 25% on heavy trucks.

In light of this threat, major pharmaceutical companies have responded with significant commitments. Among them is Eli Lilly (American multinational pharmaceutical company), which announced the development of two massive new facilities, totalling $11.5 billion, in Texas and Virginia.

But the company noted that construction of such large-scale projects will surpass Trump’s deadline, as it would take up to five years for the plants to become operational.

According to the analysts, the short-term effects of the tariff can be minimal. “The actual comment from the President is direct but its impact may be somewhere between nebulous and negligible,” Jared Holz, an analyst with Mizuho, stated.

“All major players have some production presence domestically and almost all have announced increased investment directly tied towards local manufacturing,” he added.

PhRMA, the key lobbying organization in the industry, sent up a warning, declaring that all money spent on tariffs is the money that cannot be invested in American manufacturing.

It is particularly worth noting that the 100% tariff is not imposed on generic drugs, which is of utmost importance as the suggested measure would not lead to the instant intensification of the current drug shortage crisis in the United States since generic producers are on a very thin margin, and they may just merely cease selling in the country in case of such an imposition.