President Trump Announces and Then Pauses 100 Percent Tariff on Branded Pharmaceuticals from Companies Without U.S. Factories Under Construction

This article was exclusively distributed to subscribers on September 29, 2025. Click to receive additional information about how to subscribe and to activate a complimentary trial subscription.

On September 25, President Trump  on social media that the Administration would impose a new 100 percent tariff, effective October 1, on all “branded or patented” imported pharmaceuticals, unless a product's manufacturer is “breaking ground” on a manufacturing plant in the United States or has a plant “under construction” in the United States. On Tuesday, September 30, as part of the administration’s announcement of a Most Favored Nation (MFN) pricing agreement with Pfizer, the White House stated that tariffs on other branded drug manufacturers would be paused while MFN negotiations with such manufacturers continue, in addition to announcing a specific three-year grace period for tariffs on Pfizer’s products.

The September 25 announcement appeared to be part of the Administration’s forthcoming conclusions and planned actions resulting from the Section 232 investigation of potential national security tariffs on pharmaceuticals that in April. Under Section 232 of the Trade Expansion Act of 1962, the Secretary of Commerce is required to investigate the national security grounds for imposition of a particular tariff before the President is able to impose tariffs on imports on national security grounds.

A more formal announcement of the Section 232 investigation outcome may still come before negotiations with other branded drug manufacturers conclude. The President’s announcement did not explicitly state that the new 100 percent tariff level will not apply to trading partners with which the United States has announced bilateral trade deals, but these agreements may limit the effect of the new threatened tariff rate, such as the agreement between the U.S. and the European Union (EU) that stated that branded pharmaceuticals would be subject to Section 232 tariffs no higher than 15 percent. A number of brand pharmaceutical manufacturers besides Pfizer have recently announced plans to expand investments in domestic manufacturing , and it is not yet clear how the Administration will treat each such commitment in relation to the announced tariff rate.

The announcement did not provide any details on how the Section 232 tariffs may treat generic pharmaceuticals, nor how active pharmaceutical ingredients (API) or key starting materials, which were also a subject of the Section 232 pharmaceutical investigation, will be treated. The bilateral trade agreements with the EU, however, specifically stated that the United States will continue to apply an effective zero percent tariff on generic pharmaceuticals and API from the EU.

For more on the initiation of the Section 232 investigation of pharmaceutical tariffs, Manatt on Health subscribers can see the April 21 of Insights This Week.

For more on the U.S.-EU agreement, Manatt on Health subscribers can see the August 25 of Insights This Week.

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