Much of the drugs consumed by Americans come from India, Europe, and China and they have been imported without tariffs. However, during a Tuesday night dinner, Trump said, "We're going to be announcing very shortly a major tariff on pharmaceuticals. And when they hear that, they will leave China."
In his announcement, he said that his relationship with China changed forever over Covid. The virus, believed to have been created through gain-of-function research in a Wuhan lab, traveled the world causing death, disruption, and economic disaster. Trump imposed a 104% tariff on China on Tuesday as the trade war escalates.
Speaking to reporters last week, Trump said these coming tariffs would be "at a level that you haven't really seen before." Many have called for the US to be self-sufficient where drugs are concerned.
A 1995 World Trade Agreement aimed at keeping drugs low-cost has been the basis for keeping tariffs off of pharmaceuticals, but for Trump, who saw first-hand the disruption of the global supply chain during the Covid pandemic, bringing the manufacture of drugs to the US has been a high priority.
The BBC reports that "India supplies nearly half of all US generics, or cheaper versions of popular drugs, saving the country billions in healthcare costs."
The reason that drug makers have taken their factories overseas, per testimony delivered to the FDA in 2019 just months before the Covid pandemic hit the US, is that "most traditional drug production processes require a large factory site, often have environmental liabilities, and can utilize a low-cost labor force."
In 2020, the Trump administration worked to help Kodak remake its photo factories in upstate New York into pharmaceutical factories. With a loan of $765 million to Kodak in 2020, that company is set to begin production in Rochester in 2025.
