Trump unveils phased tariffs on generic drugs to boost US production

President Donald Trump announced Tuesday that imported generic drugs will remain tariff-free for the next two years before facing steep new import duties, saying the move is designed to encourage pharmaceutical companies to manufacture more medicines in the U.S. In a Truth Social post, Trump said all generic drugs imported into the U.S. will continue to face a 0% tariff beginning Aug. 1, 2026, for a two-year transition period. After that, the tariff will rise to 100% for one year before increasing to 200%."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. The president said the phased approach is intended to give pharmaceutical companies time to move production to the U.S. before the higher tariffs take effect. TRUMP ADMINISTRATION HITS CANADA WITH 50% TARIFF OVER ALLEGED TRADE 'DISCRIMINATION' President Donald Trump gestures while meeting with Lebanese President Joseph Aoun in the Oval Office at the White House on Tuesday. (Aaron Schwartz/CNP/Bloomberg via Getty Images / Getty Images)"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 wrote.Trump said the objective of the policy is "to protect the people of the United States."The announcement marks the latest effort by the Trump administration to use tariffs as leverage to encourage domestic manufacturing in industries it considers strategically important, including pharmaceuticals. The administration has repeatedly argued that the U.S. has become overly dependent on foreign countries for critical medicines and pharmaceutical ingredients.Trump said his administration's existing policy on patented, branded and innovative drugs would remain unchanged.WHAT ARE THE MAIN STICKING POINTS IN THE TRUMP ADMIN'S TRADE NEGOTIATIONS WITH CANADA, MEXICO? Boxes of generic prescription drugs and blister packs of tablets from Tehatta, India. President Donald Trump announced a phased tariff plan on imported generic drugs aimed at encouraging pharmaceutical manufacturing in the United States. (Soumyabrata Roy/Majority World/Universal Images Group via Getty Images / Getty Images)"The Policy on Patented, Branded, or Innovative Drugs, which has been so successful, will remain as is," he wrote.He also pointed to what he described as a surge in domestic investment by drugmakers."Pharmaceutical Facilities are being built, at a level never seen before, all over the United States of America," Trump wrote.The Association for Accessible Medicines, which represents generic drug manufacturers, said it is seeking additional details on the proposal but supports policies that strengthen domestic manufacturing."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," Association for Accessible Medicines President and CEO John Murphy III said in a statement shared with FOX Business.Murphy said the industry has expanded manufacturing investments in the U.S. over the past two years but argued that structural problems involving purchasing and reimbursement continue to hinder additional growth. He said the group looks forward to working with the administration and Congress on policies to strengthen the domestic generic drug industry. Capsules move along a production line at a Sanofi pharmaceutical manufacturing facility in Lisieux, France. President Donald Trump announced a phased tariff plan on imported generic drugs aimed at encouraging pharmaceutical manufacturing in the U.S. (Lou Benoist/AFP via Getty Images, File / Getty Images)Generic drugs account for more than 90% of prescriptions filled in the United States, according to the Food and Drug Administration. CLICK HERE TO GET FOX BUSINESS ON THE GOMany also rely on global manufacturing networks and imported active pharmaceutical ingredients, making supply chain resilience a growing focus for policymakers and the pharmaceutical industry.The announcement gives manufacturers a two-year runway before tariffs begin increasing, allowing companies time to decide whether to build or expand U.S. production facilities or continue importing products while facing substantially higher duties.