When Merriam-Webster picks its word of the year for 2025, my money is on ‘tariff.’ It has dominated headlines thanks to President Trump’s constant threats to slap them on everyday American imports. The president’s latest idea is a of a 100 percent tariffs on pharmaceuticals, unless the manufacturer begins construction of a new plant in the U.S. This plan will drive up medicine prices and reduce access for every American.
Tariffs are a tax on imports, paid for by consumers—not foreign businesses. Even a 25 percent tariff would increase drug costs by $51 billion annually, hitting households with an additional $600 a year in medicine expenses. Millions of Americans already struggle to afford their prescriptions, and higher costs will only increase the number of people who don’t take their prescriptions. The administration insists that tariffs will bring pharmaceutical manufacturing to the U.S., but the reality is they will leaved Americans paying more for fewer drugs.
President Trump’s proposal goes far beyond 25 percent. In 2024 the U.S. imported $213 billion in pharmaceuticals. A 100 percent tariff amounts to either Americans paying as much as $213 billion more or going without crucial medicines.
The tariffs and onshoring manufacturing stand directly opposed to President Trump’s other stated goal of reducing drug prices by “1,500 percent.” If it were cheaper to produce drugs in the U.S., profit-driven companies would already be doing it. Once foreign competitors face an artificial 100 percent price hike, U.S. manufacturers will have no incentive to cut costs or lower their prices. High American labor costs and regulatory burdens make America one of the most expensive places to produce drugs. Tariffs and forcing manufacturing onshore instead of addressing regulatory issues that make U.S. manufacturing more expensive would make pharmaceuticals even more expensive and less accessible.
On top of the direct harm to patients, tariffs would hurt the U.S. pharmaceutical industry itself. Imposing blanket tariffs on all imported pharmaceuticals would violate the 1994 WTO Pharma Agreement, a pact that has kept most American pharmaceutical imports and exports tariff free for over three decades. For 31 years Canada, the EU, Japan, China, Norway, Switzerland, the U.K., and the U.S. have recognized the threat to their citizens’ health that pharmaceutical tariffs pose.
Once the U.S. breaks that agreement, the other nations are free to impose tariffs on U.S. pharmaceutical exports, which totaled $94 billion in 2024. Instead of boosting the American pharmaceutical industry, tariffs would shrink its markets, choke revenues, and undermine innovation.
It’s hard to imagine U.S. pharmaceutical companies continuing to lead the world in research while cut off from overseas markets and bogged down by expensive and inefficient production at home.
The good news is that security and affordability don’t have to conflict. The U.S. can reduce supply-chain risks without tariffs by diversifying sources of medicines overseas. If the administration’s concern is dependence on another country, the solution isn’t to concentrate production in our own high-cost market. The solution is to ensure that alternatives exist. The U.S. doesn’t have to be reliant on a single country for a particular medicine and can instead import from manufacturers in multiple countries. Resilient supply chains give the U.S. leverage in negotiations and protection from both hostile governments and natural disasters.
Americans deserve affordable medicine and the confidence it will be there when needed. Tariffs do the opposite: higher costs, fewer choices, and a weaker pharmaceutical industry. It is not isolation, but diversification that will lead America to secure and affordable pharmaceuticals.
Justin Leventhal is a senior policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, visit www.TheAmericanConsumer.Org or follow us on X @ConsumerPal.