President Donald Trump has unveiled a new set of tariffs, including a significant 100% duty on branded or patented pharmaceuticals, effective October 1, 2025. This tariff will not apply to companies that are actively constructing manufacturing plants in the United States. Trump made the announcement via social media, stating, "Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started."

This announcement is part of a broader strategy to impose tariffs on various industries, with additional duties set to take effect next Wednesday. Imported heavy trucks will face a 25% tariff, while kitchen cabinets and bathroom vanities will incur a 50% charge. Upholstered furniture imports will be taxed at 30%. These measures represent a significant expansion of Trump's tariff policies, which he initiated shortly after taking office.

The timing of the announcement coincides with Trump's increased use of executive powers, a move that has drawn attention amid ongoing political tensions. Notably, the announcement came as former FBI Director James Comey faced perjury charges, a situation that has been linked to Trump's influence.

The pharmaceutical tariff plan could provide exemptions for multinational drug companies that have established a presence in the U.S. However, the White House has not provided further details on this aspect. Major pharmaceutical companies, such as Merck & Co. and Eli Lilly & Co., operate numerous manufacturing facilities worldwide. According to the Biotechnology Innovation Organization, nearly 90% of U.S. biotech firms depend on imported components for at least half of their approved products.

Following the tariff announcement, Asian stock markets reacted negatively, with shares in Japan, Australia, and South Korea declining. The S&P 500 futures also saw a reduction in earlier gains, and Asian pharmaceutical stocks experienced a downturn.

Trump's tariffs are being implemented under Section 232 of the Trade Expansion Act, which allows the administration to impose tariffs without congressional approval if imports are considered a national security threat. This approach has previously been applied to tariffs on automobiles, copper, steel, and aluminum. Additional duties on critical imports, including semiconductors and essential minerals, are anticipated in the near future.

The administration has initiated investigations into imports of robotics, industrial machinery, and medical devices, which could significantly impact domestic manufacturers. In April, the Commerce Department began examining the implications of all drug imports—both finished products and raw materials—on U.S. national security.

In early July, Trump indicated he would allow drug companies some flexibility to relocate their operations to the U.S. before imposing tariffs of up to 200% on their products. However, a trade agreement reached between the U.S. and the European Union in late July established a 15% tariff on pharmaceutical products, which means European drug exports may be exempt from the new sector-specific tariffs.

The sectoral tariffs are expected to be more stable than the country-level tariffs previously imposed under the International Emergency Economic Powers Act, which are currently under review by the Supreme Court after being deemed illegal by two lower courts.

In addition to tariffs, Trump has targeted the pharmaceutical industry through an executive order aimed at reducing drug prices by aligning U.S. costs with the lowest prices paid abroad. This order, signed on May 12, encourages companies to voluntarily lower prices or face regulatory actions, although the specifics of enforcement remain unclear.