Background and Relevance of the Pharmaceutical Market
The United States boasts the world’s largest pharmaceutical market, characterized by high sales of prescription drugs, vaccines, painkillers, and antibiotics. This market is driven by chronic treatments, biotechnology products, and over-the-counter goods, fueled by innovation and an aging population.
Trump’s Announcement
President Donald Trump announced on Thursday that a 100% tariff will be imposed on pharmaceutical product imports to the United States starting October 1, 2025. From January to July 2025, the US imported these products worth $138.699 billion, marking a 14% annual increase, according to the Department of Commerce.
“Starting October 1, 2025, we will impose a 100% tariff on any branded or patented pharmaceutical product, unless the company is BUILDING its pharmaceutical manufacturing plant in the US,” Trump stated via social media.
“‘BUILDING’ will be defined as ‘starting construction’ and/or ‘under construction.’ Therefore, no tariff will apply to these pharmaceutical products if construction has already begun. Thank you for your attention to this matter!”, he added.
Top Pharmaceutical Suppliers to the US
Ireland was the largest supplier of pharmaceutical products to the US in the first seven months of 2025, with $27.675 billion, a decrease of 3.1% from the previous year.
- Germany: $14.370 billion (+38.4%)
- Switzerland: $13.979 billion (+44.7%)
- India: $10.147 billion (+31.7%)
- Singapore: $8.220 billion (-15.5%)
Mexico’s Position in the Pharmaceutical Market
Although Mexico is the leading exporter of overall goods to the US, it ranked 25th among the largest suppliers of pharmaceutical products to the US from January to July 2025, with $615 million—a 1.3% annual increase.
Mexico’s Secretary of Economy, Marcelo Ebrard, has highlighted this contrast as a business opportunity for companies establishing themselves in Mexico.
Trump Administration’s Trade Policies
Since January 2025, the Trump Administration has imposed additional tariffs on imports. Initially, they invoked the International Emergency Economic Powers Act (IEEPA) to tax most products at 10%, up to 41% for specific partners due to trade deficits and other reasons.
Subsequently, they used Section 232 of the Trade Expansion Act of 1962 to impose tariffs on steel and aluminum (50%), along with new duties on automobiles, auto parts (25%), and copper (50%) citing national security risks.
Furthermore, the Trump Administration is investigating other sectors and may extend tariffs to these products soon.
Regional Tariff Impact
US customs apply tariffs of 35% to Canada and 25% to Mexico on products not complying with the USMCA due to alleged non-cooperation on fentanyl and migration; 25% on light vehicles to both countries (excluding US content) and 50% on steel, aluminum, and copper to both nations.
Additionally, the Trump Administration is conducting investigations into semiconductors, pharmaceuticals, critical minerals, heavy-duty trucks, aircraft, drones, and polysilicon (used in solar panel and electronic chip manufacturing).
