Trump is getting ready drug tariffs of as much as 100%

The Trump administration on Thursday imposed new tariffs on brand-name drugs from drug companies that have not reached agreements with the president to lower their U.S. drug prices – a long-awaited move that is likely to affect only a small fraction of drugmakers.

“We need to ensure that our drug supply is protected, safe and domestic,” a senior government official, who did not want to be named, told reporters on Thursday. “That’s what we do.”

Also on Thursday, the Trump administration changed how tariffs are calculated on imported steel, aluminum and copper raw materials, as well as imported products containing those metals.

Patented drugs and their active ingredients are subject to a 100 percent duty rate under the drug plan, but there are options for drugmakers to reduce or avoid the duties, the official said.

The government will impose a 20% tariff on companies planning onshore production, which would rise to 100% in four years. Drug manufacturers that have fully entered into drug pricing agreements or are currently negotiating with the Department of Health and Human Services and are setting up production domestically would be exempt from the tariffs. New domestic facilities must be completed by January 2029 to qualify, the official said.

Larger drugmakers have 120 days before the 100 percent tariff takes effect, the official said, but the government expects more companies to announce retraining plans by then. Smaller drugmakers that rely on contract manufacturers have 180 days before this rate is reached.

Meanwhile, some countries that have major trade deals with the U.S. will face different drug levies, with a 15% rate in place in the European Union, Japan, Korea and Switzerland. The U.K. will face a 10% tariff partly because the government has increased drug prices, the official said.

“In these countries, production can stay in these countries because they have a major trade agreement with America,” the official said.

Genetic products, biosimilars and related ingredients are not currently subject to tariffs, but that will be reassessed in a year, the White House said in a briefing note.

Certain specialty pharmaceuticals, including those for animal health and the treatment of rare diseases, will be exempt from duties if they come from countries with trade agreements or “meet an urgent public health need,” the fact sheet says.

The plan marks another shift in Trump’s aggressive trade strategy, more than a month after the Supreme Court struck down global levies he introduced in 2025 that excluded the pharmaceutical industry. The sector-specific tariffs follow a Commerce Department investigation that found certain drug imports posed a national security risk to the United States.

U.S. President Donald Trump (center) speaks alongside Secretary of Health Robert F. Kennedy Jr. (R) and National Institutes of Health (NIH) Director Jayanta Bhattacharya (L) during a press conference on prescription drug prices in the Roosevelt Room of the White House on May 12, 2025 in Washington, DC

Jim Watson | Afp | Getty Images

Since November, more than a dozen major drugmakers, including Eli Lilly, Pfizer And Novo Nordiskhave reached agreements with Trump to lower the prices of new and existing drugs. These agreements are part of the president’s “most favored nation” policy, which pegs drug prices in the U.S. to cheaper ones abroad and exempts companies from tariffs for three years.

The Trump administration official said 13 companies have already signed a drug pricing agreement, while negotiations are progressing with another four drugmakers. There has already been $400 billion in commitments to the sector during Trump’s time in office to restart manufacturing, the official added.

Before the groundbreaking drug pricing agreements, Trump repeatedly threatened tariffs on pharmaceutical imports. Those threats—and efforts to curry favor with the president—triggered a new wave of U.S. manufacturing investment from the pharmaceutical industry. These commitments come at a time when domestic drug production has declined significantly.

In the separate metals tariff measure, the tariff on steel, aluminum and copper raw materials – such as aluminum sheets or steel coils – remains at 50%, but applies to the full price paid by U.S. importers.

The senior administration official said during a call with reporters Thursday that the adjustment was being made to prevent foreign sellers from underpricing their products to pay less in tariffs.

Imported finished products that contain more than 15% of these metals will now be subject to a 25% duty on the total value of the item. The previous duty was only 50% on the value of the metal in the product.

No duty is charged on finished products containing less than 15% of these metals.

A senior government official said the changes in tariffs on the metals are unlikely to affect the cost of goods, but estimates from non-governmental organizations suggest they will slightly increase the effective tariff rate.

The Committee for a Responsible Federal Budget estimates the change will result in $70 billion in additional federal revenue over the next decade.

—CNBC’s Megan Cassella contributed to this article.

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