Report: Trump Plans 100% Tariffs on Some Drugs, Announcement as Early as Thursday

The Trump administration is accelerating the implementation of 100% tariffs on certain imported drugs, specifically targeting pharmaceutical companies that have not yet reached agreements with the White House, using high tax rates as leverage to force multinational drugmakers to move production lines back to the United States.

According to the latest media reports, the relevant tariffs will be officially announced as early as this Thursday. The new tariffs will apply to companies that have not signed investment or price reduction agreements with the White House; companies that have reached agreements will be eligible for exemptions or capped tax rates.

Pfizer, AstraZeneca, and Novo Nordisk have already secured tariff exemptions by committing to increase U.S. investment and lower drug prices. Under the agreement reached by the EU in Turnberry, Scotland, the cap on drug tariffs was locked at 15%; the UK also received a three-year tariff preference on the condition of increasing NHS procurement spending on pharmaceuticals.

For pharmaceutical companies that have not completed negotiations, the 100% tariff will deliver a significant cost shock and may accelerate their re-evaluation of decisions regarding U.S. factory construction and production layouts. These tariffs are based on a national security investigation under Section 232, which provides an independent and solid legal foundation unaffected by the Supreme Court's ruling in February this year.

Legal Basis: Section 232 Investigation, Unaffected by Supreme Court Ruling

The pharmaceutical tariffs stem from a national security investigation initiated in April 2024 under Section 232 of the Trade Expansion Act of 1962.

This legal framework grants independent authorization for the tariffs, differing fundamentally in legal nature from the tariffs Trump previously imposed by invoking emergency powers.

In February this year, the U.S. Supreme Court ruled that broad tariffs imposed by Trump under emergency powers were invalid.

However, tariffs based on Section 232 are not bound by that ruling and can proceed legally. According to reports, the White House has since initiated multiple new investigations, utilizing different legal authorizations to rebuild the tariff system that was previously overturned.

Exemption Mechanism: Protection for Agreement Signatories, Pressure Shifted to Outsiders

Countries and companies that have reached agreements with the White House will be protected by exemptions. This mechanism serves as the core negotiating leverage for the current tariff policy while clearly defining the boundaries of market differentiation.

At the national level, the EU has capped drug tariffs at 15% under the Turnberry agreement; the UK secured a three-year tariff preference in exchange for a commitment to increase NHS pharmaceutical spending.

At the corporate level, Pfizer, AstraZeneca, and Novo Nordisk have all completed negotiations with the Trump administration, trading commitments for increased U.S. investment and price reductions for exemption status.

For pharmaceutical manufacturers that have not yet joined, accepting the 100% tariff or accelerating negotiations will be an unavoidable dilemma.

Leveraging High Tariffs to Drive Reshoring to the U.S.

Trump publicly stated as early as last autumn that if manufacturers of brand-name or patented drugs did not build production facilities in the U.S., their imported products would face a 100% tariff. This week's announcement marks the formal implementation of that threat.

The policy aims to create cost pressure through high tariffs to drive multinational pharmaceutical companies to build factories in the U.S. or to lower prices in exchange for market access.

Giants like Pfizer and AstraZeneca, which have completed negotiations, provide a template for others—investment commitments plus price cuts are currently the primary path to securing exemptions.

For manufacturers in major drug-exporting nations such as Ireland, Germany, and India, these tariffs will significantly increase operational uncertainty, putting urgent pressure on relevant companies to re-evaluate their U.S. export strategies and supply chain layouts.

While pressuring the pharmaceutical industry, the Trump administration is also preparing a major overhaul of the steel and aluminum tariff system, moving to impose a uniform 25% tariff on "derivative products" containing steel or aluminum, replacing the current complex and cumbersome calculation methods.

According to U.S. media reports, the new steel and aluminum tariff policy could be announced as early as this week. The new policy will stipulate that any finished product made using imported steel and aluminum will be subject to a flat 25% tariff. Current policy requires companies to calculate tax burdens based on the steel and aluminum content in the product, with maximum tariff rates reaching 50%.

Analysts believe this tariff adjustment is more of a "technical optimization" of existing trade protection policies rather than a change in direction. The U.S. is still attempting to protect domestic industries through tariffs but is transitioning toward a framework that is "more operable and provides greater certainty" at the execution level.

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