Washington/New Delhi: US President Donald Trump has said that pharmaceutical imports will soon be hit with “major” tariffs as part of his efforts to drive manufacturing back to the US, a move that could hit India, a leading global pharma producer, hard.
While drug imports evaded the first round of tariffs that Trump imposed on countries around the world, the US president said they will not be spared.
“We’re going to be announcing very shortly a major tariff on pharmaceuticals,” he said at a dinner of the National Republican Congressional Committee on Tuesday.
“And when they hear that, they will leave China. They will leave other places because they have to sell — most of their product is sold here and they’re going to be opening up their plants all over the place,” Trump said, CBS news reported.
Domestic drug manufacturing has shrunk dramatically in recent decades. Most production of active pharmaceutical ingredients has moved to China and other countries, according to the Food and Drug Administration.
Trump announced global tariffs of 10 percent on hundreds of countries on April 2 and additional reciprocal levies are scheduled to start Wednesday, including a minimum 104 percent tariff on Chinese imports.
Trump gave no details on the pharmaceutical tariffs.
India’s pharmaceutical industry, with its robust global footprint, is the fifth-largest contributor to India’s manufacturing GVA. India, already the largest global supplier of generic medicines, fulfills approximately 20% of global generics demand.
India, often referred to as "the pharmacy of the world”, is the largest provider of generic medications by volume and supplies more than 60% of the world's vaccines. Indian pharmaceutical companies, such as Sun Pharma, Cipla, and Dr. Reddy's Laboratories, play a significant role in global healthcare by manufacturing and exporting low-cost generic drugs and vaccines to developing countries and regulated markets like the US, UK, and EU, according to reports.
The US President unleashed a sweeping slate of tariffs on friends and foes alike last week, sending stocks plunging and roiling the global economy. He’s doubled down in the days since.
The president used his speech to Republican lawmakers promote his economic agenda, a wholesale realignment of trade with the ultimate vision of bringing factories and investment back into the country.
