President Trump said Tuesday that generic drugs imported into the United States will face zero tariffs for two years starting Aug. 1 before a 100 percent levy takes effect in August 2028 and rises to 200 percent a year later, invoking Section 232 of the Trade Expansion Act of 1962 to push generic-drug manufacturing onshore.
The phased schedule, announced on Truth Social, spares the industry from immediate duties but sets a hard deadline for reshoring low-cost drug production. A White House official told Politico the administration will invoke Section 232, the national-security provision the president used to hit patented pharmaceuticals with a 100 percent tariff on April 2. Nearly all U.S. prescriptions are filled with generics, most manufactured abroad.
Reshoring push
"Effective August 1st, 2026, all Generic Drugs being brought into the United States will continue to have a TARIFF of ZERO PERCENT for a two year period of time, after which the TARIFF will be raised to 100% for a one year period of time, and 200% thereafter," Trump wrote. He called the escalation "a penalty" for companies that decline to build "Plant and Equipment" in the United States during the grace period. Tariffs on patented and branded drugs remain unchanged, the president said. The formal executive order has not been released.
Foreign exposure
India supplies nearly 50 percent of the generic medicines consumed in the United States, and the U.S. market accounts for about a third of annual Indian pharma exports. Chinese firms dominate the upstream supply of active pharmaceutical ingredients including amoxicillin and heparin. The two-year runway offers New Delhi a negotiating window in ongoing trade talks with Washington, Arpit Chaturvedi, South Asia advisor at Teneo, said.
Pricing lever
Trump has paired the tariff threats with his "most favored nation" pricing policy, tying U.S. drug prices to lower rates paid abroad. More than a dozen drugmakers — including Eli Lilly, Pfizer, Novo Nordisk, Merck, Bristol Myers Squibb and AstraZeneca — have struck deals with the White House that exempt them from tariffs for three years in exchange for price cuts. U.S. Trade Representative Jamieson Greer told Politico this month that additional governments face trade investigations over pharmaceutical pricing, and the office last month opened a probe into Germany's pricing practices.
Industry pushback
The Association for Accessible Medicines, which represents generic manufacturers, said the industry needs more detail and urged the administration to address structural barriers to expanding domestic capacity. "We need to understand more the specifics of the policy, but the generics industry is committed to pursuing policies that support and stabilize both the industry and the access necessary to ensure patients have reliable options for affordable medicines," John Murphy III, the group's president and chief executive, said in a statement.
Deborah Elms, head of trade policy at the Hinrich Foundation, said building pharmaceutical production in the United States is complex and costly, and nearly all the inputs would still come from abroad. "I am not sure that even a potential 200% tariff will change the fundamental math," she said.
With the duties not biting until 2028 — a U.S. election year — Indian drugmakers are expected to lobby Washington for exemptions and pursue contract-manufacturing deals in the meantime, Chaturvedi said.