Tariffs on Pharmaceuticals Threaten Jobs and Cures
The U.S. boasts the most innovative biopharmaceutical industry in the world. These companies deliver vital cures to patients and the majority of sales the industry make are made by domestic companies. But that global leadership in a critical industry was challenged in May 2025, when the Department of Commerce announced it was initiating an investigation to determine the impact that pharmaceutical drug imports have on national security. Section 232 of the Trade Expansion Act of 1962, as amended gives the Secretary of Commerce the authority to launch investigations and take steps to “adjust the imports of an article and its derivatives.”
On April 2, 2026, President Trump announced the results of the investigation and issued an executive order that would implement tariffs of up to 100 percent on pharmaceutical imports. Pharmaceuticals and active pharmaceutical ingredient imports do not pose a national security risk and tariffs on these products will increase production costs for critical medicines and threaten American manufacturing jobs.
President Trump’s executive order calls for a 100 percent tariff on imported brand name drugs and a 15 percent tariff on drugs imported from allies like Japan, South Korea, the European Union (EU), Lichtenstein and South Korea, and an unspecified lower rate for drugs imported from the United Kingdom. Companies that have agreed to onshore their production will face a 20 percent tariff, and those that have agreed to move their production to the United States and also enter a Most Favored Nation (MFN) drug pricing agreement with the Department of Commerce will be fully exempt from tariffs. This deal threatens manufacturers with one bad policy, tariffs, unless they agree to another bad policy, MFN.
While the U.S. is the global leader in pharmaceutical production and sales, imported drugs are essential to maintain access to vital cures and treatments. Most drug imports are made by countries that are allies with the U.S., including Germany, Japan, and the United Kingdom. The Republic of Ireland is the single largest exporter of pharmaceutical products, contributing 25 percent of U.S. imports in 2023, when the EU accounted for 62 percent of total U.S. imports.
Tariffs on pharmaceutical drugs will significantly raise production costs and make U.S drugs less competitive for export sales. An April 22, 2026, Ernst and Young report found that a 25 percent tariff on pharmaceutical products would increase drug costs by nearly $51 billion annually. The biopharmaceutical industry is a leading U.S. manufacturer with 1.7 million jobs, which is more than industries like aerospace, coal, iron and steel. Export sales provide 490,000 of those jobs, and higher production costs from tariffs will put them at risk.
Imported drugs and drug ingredients come mostly from allied countries with whom the U.S. enjoys a healthy trade relationship. Instead of imposing widespread and damaging tariffs that will raise prices for patients, lead to job losses, increase production costs, and reduce access to vital cures and treatment, the administration should make more agreements that address price disparities like the U.S.-U.K. deal.
