6 days ago

US sets zero tariff for generic drugs until 2028 before steep hikes

US President Donald Trump has set zero tariff for generic medicines imported into the country until 2028, following which the duty will be hiked to 100 per cent. Further in August 2029, the duties on drugs will be increased to 200 per cent.

The zero tariff for the next two years is effective August 1.

“This is done in order to reshore generic pharmaceutical production into America, with a penalty to those companies that decide not to build plant and equipment within the stated period of time given to them. The objective of this policy is to protect the people of the United States,” Trump said in a social media post.

“The policy on patented, branded, or innovative drugs, which has been so successful, will remain as is. Pharmaceutical facilities are being built, at a level never seen before, all over the United States of America,” he said, ending the post with this trademark signature “Thank you for your attention to this matter!”

Trump had repeatedly sought pharmaceutical companies to start manufacturing generic drugs in the US, stating greater domestic production is necessary to protect the country’s drug industry. Ahead of the 2026 mid-term elections, the US president had highlighted high drug prices as a key concern.

The announcement comes as the Trump administration continues to use tariffs as a negotiating tool in its trade policy.

In April 2025, Trump administration launched an investigation into pharmaceutical imports under the Trade Expansion Act, potentially opening the door to tariffs on medicines produced outside the US.

India is the largest supplier of generic medicines to the US, with the country exporting drugs worth $9-10 billion every year. In FY26, the country’s pharmaceutical shipments to the US stood at $9.47 billion, according to Directorate General of Commercial Intelligence and Statistics data, which was compiled by Pharmexcil.

Indian generics account for nearly 40 per cent of all US usage.

A Global Trade Research Initiative (GTRI) report similarly estimated India’s pharmaceutical exports to the US at $9.7 billion, which is about 38 per cent of its total global pharma exports of $25.8 billion.