Trump plans generic drug tariffs from 2028 with two-year delay testing U.S. onshoring push

President Donald Trump said generic drugs imported into the U.S. will face zero tariffs for two years starting August 1, before a 100% levy takes effect in August 2028 and rises to 200% a year later.

The phased schedule is intended to push generic drugmakers to move production onshore, Trump said in a social media post Tuesday, describing the escalation as “a penalty” for companies that don't build plants and facilities in the U.S. within the grace period.

Nearly all prescriptions in the U.S. are filled with generic drugs that often come via overseas manufacturing and involve complex ownership structures, according to Legis1, a congressional intelligence platform.

The latest tariff salvo underscored Trump's goal to reshore low-cost drug production to the U.S., said Deborah Elms, head of trade policy at the Hinrich Foundation.

But building pharmaceutical production in the U.S. is complex and costly — and nearly all the inputs would still come from abroad, Elms said, adding that “I am not sure that even a potential 200% tariff will change the fundamental math.”

Trump has used tariff threats and his most-favored-nation pricing policy to press drugmakers into charging Americans no more than patients in other high-income countries.

Tariffs on patented and branded drugs will remain unchanged, Trump said. The president imposed a 100% levy on patented pharmaceutical products and ingredients under Section 232 on April 2, while exempting generic drugs, biosimilars, and related ingredients. Larger drugmakers were given 120 days before the 100% tariff rate goes into effect, and smaller drugmakers, which rely on contract manufacturers, had 180 days before that rate hits.

More than a dozen major drugmakers, including Eli Lilly, Pfizer and Novo Nordisk, have struck deals with Trump to lower the prices of new and existing medicines. Those agreements are part of the president's “most favored nation” policy, which ties U.S. drug prices to cheaper ones abroad, and exempts the companies from tariffs for three years.

The stakes are high for India, as the country's pharmaceutical companies supply nearly 50% of all generic medicines consumed in America. The U.S. accounts for about a third of India's pharma exports, mostly cheaper versions of popular drugs, annually.