Generic Medicines: Can Tariffs Bring Production Back to the United States?

By: Didier Chambovey

On July 22, President Trump announced on the Truth Social platform that generic medicines - currently imported into the United States duty-free - will be subject to a 100% tariff starting in August 2028 for one year, and 200% thereafter. The stated objective is to repatriate the manufacturing of these products.

Companies that fail to build factories on U.S. soil within the allotted time would face sanctions, the nature of which has not been specified.  This announcement complements the measure introduced in April concerning patented medicines, which were subjected to a 100% tariff. This rate, however, drops to 20% for companies committing to reshore the production of their treatments and active ingredients within four years. In addition, exemptions are planned for laboratories that join the administration’s price-reduction initiatives. Finally, reduced tariff rates apply to countries that have signed trade arrangements with the United States. It has thus been agreed, notably with the European Union and Switzerland, that U.S. tariffs on patented medicines be capped at 15%.

President Trump does not mention similar mitigations for generic medicines, which are explicitly exempted from tariffs in agreements negotiated with the EU, India, and Switzerland. His succinct announcement provides no operational specifications, neither regarding the countries affected nor the products targeted, and the proposed policy is poised to confront substantial headwinds.