The Trump administration is holding off on its threatened 100 percent tariffs on drugmakers that aren't building facilities in the U.S., with officials saying the new tax is still being prepared.
President Trump said on his Truth Social platform last week that, "Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product," unless the drugmaker is in the process of building a manufacturing plant in the U.S.
This announcement gave companies less than a week to prepare for a significant added tax on their imported products. Supply chain experts were left scratching their heads over the mechanics of how this policy would be enforced.
With the federal government shut down, it's unclear whether the necessary federal employees are on the job to enforce this rule.
The administration also indicated Monday it would offer some grace in terms of enforcement.
In the Oval Office on Monday, Commerce Secretary Howard Lutnick said, "So, while we're negotiating with these companies, we're going to let them play out and finish these negotiations. Because they are the most important thing to the American people. So we are standing by helping and working with them."
Officials also confirmed the added tariffs were being enforced under Section 232 of the Trade Expansion Act of 1962, which gives the president authority to restrict imports that may threaten national security.
The Commerce Department initiated an investigation into the national security impact of importing pharmaceuticals and pharmaceutical ingredients earlier this year, and according to experts, this investigation likely strengthens the saliency of the tariffs.
Pfizer CEO Albert Bourla, who announced Monday his company will comply with Trump's "Most Favored Nation" executive order, said he had received a three-year “grace period” from 232 tariffs.
The White House indicated, however, that while enforcement may not take place immediately, the tariffs are still in play.
“As Secretary Lutnick made clear in the Oval Office today, starting October 1, the Trump administration will begin preparing tariffs on pharmaceutical companies that do not begin on-shoring their manufacturing or participate in the President’s Most Favored Nations push to reduce drug prices," a White House official said when reached by The Hill.
"President Trump is wholeheartedly committed to lowering drug prices for Americans and will not hesitate to utilize tariffs to do so," they added.
Source: The Hill - News
