Trump Reveals Plan to Enact 25% Tariff on Pharmaceuticals
The timing for the potential tax is yet to be determined, as the industry awaits to see the impact it could bring.
After revealing a plan in which the United States would match the tax rates of what trading partners also charge on imports (as a way to balance the trade scales),1 President Trump recently announced that that he would impose a tariff of 25% or higher on pharmaceuticals, according to Reuters.2 No timetable has been set in terms of when that tax on imports would take effect, although he intends to provide ample time to manufacturers to set up shop in the United States to allow them to avoid the tariffs.
The tariffs—if they do take effect—are expected to rise over the next year.
The same ballpark percentage applies to semiconductors. The US president had also noted late last week that tariffs in the neighborhood of 25% would apply to automobiles, and could become official as early as April 2.
Earlier this month, Trump reinstated a 25% steel import tax, along with raising the tariff rate on aluminum from 10% to 25%.3 The measures applied to metals coming from all countries, but are not expected to take effect until March 12, if they do end up officially being enacted.
Before that, he had announced a 30-day pause on tariffs on Canada and Mexico, after initially ordering 25% taxes on imports.4 Meanwhile, the 10% tax on goods for China have been in effect since Feb. 4.
Unrelated to the China tariffs per se, Merck’s recent earnings call revealed that despite the company generating worldwide sales of $64.2 billion—representing a 7% increase over 2023—the company will be temporarily suspending Gardasil shipments to China until at least June of this year, due to a decline in sales and excess inventory that needs to be cleared.5
The pharma company’s human papillomavirus vaccine made $8.6 billion in global sales last year, a 3% drop over 2023 numbers.
References
1. Saraceno N. Trump Enacts Reciprocal Tariffs on Trading Partners. Pharmaceutical Commerce.February 13, 2025. Accessed February 19, 2025. https://www.pharmaceuticalcommerce.com/view/trump-enacts-reciprocal-tariffs-on-trading-partners
2. Shalal A, Bose N. Trump says he will introduce 25% tariffs on autos, pharmaceuticals and chips. Reuters. February 18, 2025. Accessed February 19, 2025. https://www.reuters.com/business/autos-transportation/trump-auto-tariff-rate-will-be-around-25-2025-02-18/
3. Saraceno N. United States Elevates Tariffs on Steel and Aluminum. Pharmaceutical Commerce. February 11, 2025. Accessed February 19, 2025. https://www.pharmaceuticalcommerce.com/view/united-states-elevates-tariffs-steel-aluminum
4. Saraceno N. Trump Pauses Canada and Mexico Tariffs. Pharmaceutical Commerce. February 4, 2025. Accessed February 19, 2025. https://www.pharmaceuticalcommerce.com/view/trump-pauses-canada-mexico-tariffs
5. Saraceno N. Merck Temporarily Halts Gardasil Shipments to China. Pharmaceutical Commerce. February 5 2025. Accessed February 19, 2025. https://www.pharmaceuticalcommerce.com/view/merck-temporarily-halts-gardasil-shipments-to-china
