SerpApi.Org
President Trump announced Tuesday evening that he plans to impose a major tariff on generic drugs imported to the United States in two years, with the goal of bringing drug manufacturing back into the country.
Writing on his social media platform, Trump said a 100% tariff will take effect in August 2028, with the tariff doubling to 200% a year later.
“This is done in order to RESHORE Generic Pharmaceutical Production into America, with a penalty to those Companies that decide not to build Plant and Equipment within the stated period of time given to them,” Trump said. He provided no details on the “penalty” that companies that do not manufacture domestically would have to pay.
The White House reportedly said the tariffs would be imposed under Section 232 of the Trade Expansion Act of 1962. The law empowers the president to impose tariffs and other restrictions on trade based on national security concerns.
No more cheap generics? U.S. consumers currently have access to a broad array of inexpensive generic drugs, including antibiotics, painkillers and cholesterol drugs, most of which are made elsewhere by manufacturers working with slim margins. Per Bloomberg, India is the largest supplier of generics to the United States, with exports worth $10.5 billion in 2024-25. Forcing drugmakers to manufacture in the United States will likely raise retail prices for those generic products, given higher labor costs and the need to build new facilities.
Alternatively, manufacturers will remain overseas and raise prices to cover the cost of the tariffs. Marta Wosińska, a senior fellow at the Brookings Institution's Center on Health Policy, told CBS News that Trump’s strategy is unlikely to have the intended effect. “A tariff can be part of a broader strategy, but is not going to by itself lead to onshoring,” she said.
John Murphy III, the head of the Association for Accessible Medicines, which represents generic drugmakers, said Trump’s announcement took the industry by surprise, though it’s not entirely clear what it means yet. Murphy told Bloomberg that he assumes there will be negotiations on the matter before the tariffs take effect. “It’s a tweet, it’s a catalyst, and we’ll see what happens,” he said.
A law to limit tariffs: Sen. Ron Wyden, the senior Democrat on the Senate Finance Committee, introduced a bill Wednesday that would limit the president’s ability to impose tariffs unilaterally and require Congress to approve new tariffs imposed under certain legal authorities.
“Donald Trump has abused every trade authority at his disposal, and he is now excavating a law from the Great Depression to once again impose vast, unilateral tariffs on products from one of our closest allies and trading partners,” Wyden said Tuesday, after Trump threatened to impose 50% tariffs on some Canadian imports earlier this week. “This is yet another shakedown that will raise the cost-of-living for Americans, their families, and small businesses across the country. Trump cannot be trusted with tariff authority.”
The Congressional Trade Powers Reform Act of 2026 would require the president to get approval from Congress for tariffs imposed under three legal authorities: Section 301 of the Trade Act of 1974, which focuses on unfair trade practices; Section 201 of the Trade Act of 1974, which focuses on threats to domestic industries; and Section 232 of the Trade Expansion Act of 1962, which focuses on national security and was invoked by Trump in the case of generic drugs.
Wyden’s bill would also eliminate two existing tariff authorities: Section 122 of the 1974 trade law, which focuses on problems revolving around international payments; and Section 338 of the Tariff Act of 1930, which focuses on discriminatory trade practices.
The bill would also establish a new joint committee on trade tasked with reviewing and approving the president’s tariff proposals, and would move the Office of the U.S. Trade Representative out of the executive office.
The bill faces long odds in a Senate controlled by the president’s party, but it could become more relevant next year if Democrats win congressional control in the November elections.
