Trump imposes new tariffs on certain pharmaceutical drugs, revamps metal tariffs

By Adam Cancryn, CNN

(CNN) — President Donald Trump is imposing a new 100% tariff on certain pharmaceutical companies that have not struck deals to sell their drugs directly to consumers as part of his “Most Favored Nation” pricing initiative, the White House announced on Thursday.

The forthcoming tariff will apply to imports of patented drugs and their active ingredients, in an effort to pressure foreign manufacturers to move their production to the US and negotiate agreements to sell their medicines directly to Americans.

The long-anticipated levies will take effect for large drugmakers later this summer, following a 120-day implementation period, a senior administration official told reporters on Thursday. Smaller companies, by contrast, will get 180 days before the tariffs kick in.

“We expect the lion’s share of the world’s patented pharmaceuticals to be building” in the US by then, the senior official said. “They’ve had plenty of warning and we are going forward with it.”

The new order includes a series of exemptions from the 100% tariff, including for any company that strikes a deal to join Trump’s “Most Favored Nation” initiative. Drugmakers that agree to move their production to the US will also get their tariff cut to 20% in exchange.

But even without taking those steps, many foreign drugmakers may end up avoiding the hefty tariff because of broader trade deals that several countries have already made with the Trump administration. Companies in the European Union, Japan, South Korea and Switzerland will only be subject to a pre-existing 15% tariff, while UK companies face just a 10% tariff.

The senior official declined to say how many companies would be hit by the 100% tariff.

The new drug tariffs would represent an initial step toward Trump’s pledge to reconstruct his aggressive trade strategy after the Supreme Court ruled in February that some of his most significant and far-reaching tariffs were unconstitutional. Until now, many of the tariffs that Trump has levied on other countries have excluded prescription drugs.

But the new levies on drugs — and separate changes to steel tariffs also announced Thursday — come despite concerns within the GOP that Trump’s aggressive trade strategy is driving prices even higher for Americans already anxious over the cost of living.

The administration has already negotiated deals with more than a dozen drug companies to sell certain medications directly to consumers as part of a “Most Favored Nation” pricing initiative aimed at lowering drug prices. As part of those deals, the drug makers escape tariffs for three years in exchange for increased manufacturing investment in the US.

The initiative includes selling medications directly to consumers on TrumpRx, but that measure only covers a limited number of drugs so far, many of which have generic alternatives that can be found cheaper elsewhere.

Revamped metal tariffs

Trump on Thursday separately signed an order revamping his tariffs on steel, copper and aluminum that officials said was aimed at cracking down on efforts by foreign sellers to minimize the amounts they owe.

The 50% tariff will now be based on the amount that US customers pay for imported metals, rather than the value that sellers assigned to their product — a change that came after the administration determined those foreign sellers were purposely undervaluing the exported metal.

Trump also made changes to a second type of tariff applied to imported products that contain significant amounts of metal, such as washing machines. Those products will now face 25% tariffs if metal makes up a certain proportion of their overall weight.

Pressed on the affordability consequences of the new measures, the senior official dismissed concerns that consumers would effectively bear the burden of any tariff-driven price increases.

“For many products it’ll be lower, for some products it’ll be a little higher, but mostly it’s fine,” the official said of the effect of the revamped steel tariffs. “I don’t think it’s going to have any impact on affordability.”

This headline and story have been updated with additional developments.

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CNN’s Tami Luhby contributed to this report.