U.S. President Donald Trump said that starting Aug. 1, the United States will keep all imported generic drugs duty-free for two years, then impose a 100% tariff for the following year and a 200% tariff after that.
Trump said on the 21st (local time) on his social media, Truth Social, "This is to bring generic drug manufacturing back to the United States," adding, "It is a measure to penalize corporations that decide not to build factories and production facilities in the United States within the given period."
Trump said, however, that he would keep existing policy for patented original drugs, brand-name drugs and innovative new drugs.
According to the U.S. Food and Drug Administration (FDA), more than 90% of the drugs sold in the United States are generics.
In April, Trump signed an executive order imposing a 100% tariff on brand-name drugs imported into the United States unless manufacturers agree to government price negotiations or commit to producing in the United States.
However, countries that have trade agreements with the United States, including Korea, the European Union (EU), Japan and Switzerland, were subject to a 15% tariff on manufactured drugs.
At that time, the United States did not impose tariffs on generic drugs, biosimilars and related raw materials, and decided to review the policy after one year.
India, the largest exporter of generic drugs to the United States, is subject to the negotiated outcome for generics and raw materials under a trade agreement signed with the United States in February.