[co-author: Olivia Kreft]
Since taking office in January 2025, the Trump Administration has announced, imposed, or reimposed various tariff-related restrictions on articles imported into the United States.
These proposed tariffs and their implementation have evolved rapidly and dynamically, at times with very little notice. Although the tariff measures that have been imposed to date have not specifically targeted the life sciences and healthcare sectors, statements made by President Trump suggest that sector-specific tariffs targeting the pharmaceutical industry may be on the horizon.
Below, our U.S. Sanctions and International Trade team discusses key developments of the Trump Administration’s tariff policies and how they may impact the global life sciences and healthcare industry in 2025 and beyond.
What tariff-related actions has the Trump Administration undertaken since taking office?
The Trump Administration has taken two concrete tariff-related actions since January 20, 2025: (1) issuing executive orders to impose blanket tariffs on articles imported from China, Canada, and Mexico into the United States; and (2) reimposing, and rescinding exceptions to, tariffs on steel and aluminum articles imported into the United States. We discuss those actions (which do not specifically target pharmaceutical articles or products) in greater depth in separate articles “Trump administration's tariffs targeting China, Canada and Mexico” and “Trump’s steel and aluminum tariffs”, respectively.
President Trump also issued a Presidential Memorandum on February 13, 2025, establishing a framework for the United States to impose so-called “reciprocal” tariffs on all goods imported into the United States. While President Trump has not yet imposed these “reciprocal” tariffs, as currently proposed, these tariffs would be designed to mirror the effect of import restrictions imposed by specific jurisdictions on U.S.-origin articles (e.g., U.K. products imported into the United States would be subject to an equivalent duty rate as representative items imported into the U.K. from the United States). As written, the February 13 Presidential Memorandum does not suggest that pharmaceutical products would be excepted from such duties.
What has President Trump said about imposing tariffs on pharmaceutical products, specifically?
Distinct from the discussion regarding reciprocal tariffs, President Trump has threatened to impose 25% tariff duty rates on “pharmaceutical” products imported into the United States. The Trump Administration does not appear to have announced the precise legal basis it would rely on to impose such tariffs. We note, however, that blanket tariffs imposed on a jurisdictional basis (as opposed to a product- or industry-specific basis) could capture pharmaceutical products imported into the United States from targeted jurisdictions (e.g., President Trump’s 25% additional tariffs on all articles imported from Mexico).
President Trump has suggested in public interviews that pharmaceutical-specific tariffs could be imposed as early as April 2, 2025.1
Has any formal action been taken yet to impose tariffs on either finished pharmaceutical products or starting materials and intermediates?
As of March 20, 2025, the Trump Administration has not formally imposed tariffs specifically targeting pharmaceutical articles (or starting materials and/or intermediates, as such) as a category or class of products. However, as noted above, jurisdiction-specific tariffs – such as those President Trump has threatened to impose on Canadian and Mexican articles, and actually has imposed on Chinese articles, each under the International Emergency Economic Powers Act of 1977 (IEEPA) – will likely capture such products absent specific future exceptions.
When could we foresee the Trump Administration taking this action?
Some reporting suggests President Trump is considering imposing tariffs specifically targeting pharmaceutical articles as soon as April 2, 2025, though the Trump Administration does not appear to have published explicit guidance on this point.2
As part of his plan to impose the “reciprocal” tariffs discussed above, President Trump has directed the Secretary of the U.S. Department of Commerce (Commerce ) to identify the extent to which individual jurisdictions have applied tariffs or other import-restrictions to any U.S. products. While the Trump Administration has teased April 2, 2025, as a potentially consequential date for the implementation of the “reciprocal” tariffs, it is not clear precisely when Commerce will finish its review to identify ex-U.S. import-related restrictions.
Finally, it is not clear from public reporting whether a 25% tariff on all pharmaceutical articles imported into the United States would take the place of a specific “reciprocal” tariff, or if such tariff rate would be additional to any “reciprocal” tariff imposed by President Trump on pharmaceutical articles imported from a specific jurisdiction (e.g., a 25% rate for all imported pharmaceuticals + a country-specific reciprocal tariff).
Would the imposition of such tariffs require the approval of Congress?
The short answer is the age-old legal answer of “it depends.” The power to tax is vested in the Legislative Branch under Article I of the U.S. Constitution. However, Congress has – under certain limited circumstances – delegated some of this authority to the Executive Branch. For example, under the Trade Expansion Act of 1962 (the authority President Trump relied on to impose steel and aluminum tariffs), the President is authorized to, among other things, impose tariffs on certain types of articles where he or she concurs with a conclusion from Commerce that the import of such article(s) threatens to impair the national security of the United States. President Trump already has imposed tariffs on China (and threatens to do so against Canada and Mexico) under IEEPA, though we note such action is a matter of first impression under that authority.
Is there any sort of legal challenge that could be made?
Potentially, but the feasibility of any challenge generally would depend on the precise authority President Trump would/will use to impose such tariffs, as well as the identity of the party bringing the claim. It is also important to remember that this type of action by the President is relatively unprecedented, so while avenues may exist to challenge the validity of these proclamations and executive orders, there isn’t a specific roadmap for how those challenges will play out either in process (e.g., timing) or substance (i.e., whether they would successfully reverse presidential action or result in other relief).
Finally, the authorities the Trump Administration has relied on to date generally involve or require a determination by the President that a threat to U.S. national security exists, and that tariffs (or other trade-related restrictions) are the appropriate measure(s) to respond to such threat(s). Although doctrines concerning judicial deference to the Executive Branch are in a state of flux, federal jurisprudence historically has accorded substantial deference to the Executive Branch when adjudicating cases involving matters of national security.
Outside of U.S. law specifically, various commentators have suggested that jurisdictions could seek redress for future tariffs on pharmaceuticals at the World Trade Organization (WTO) under the 1994 Agreement on Trade in Pharmaceutical Products (the Pharma Agreement).3 The Pharma Agreement – which is signed by the U.S., Canada, China, the EU, Japan, Norway, Switzerland, and the U.K. – eliminates tariffs and other duties and charges on a large number of pharmaceutical products and the substances used to produce them, permanently binding them at duty-free levels. However, proceedings before the WTO are a deliberate process that can take up to a year or more before the adjudicating panel issues its initial report, which itself does not constitute a resolution of the underlying claim.4 This suggests that the route to more immediate relief may lead to proceedings in U.S. courts and under U.S. law.
Footnotes
- J. Liu and E. Buchwald, “Trump plans to impose 25% tariffs on autos, chips and pharmaceuticals”, CNN, Feb. 19, 2025, available at https://www.cnn.com/2025/02/19/economy/us-new-tariff-plans-trump-intl-hnk/index.html.
- J. Liu and E. Buchwald, “Trump plans to impose 25% tariffs on autos, chips and pharmaceuticals”, CNN, Feb. 19, 2025, available at https://www.cnn.com/2025/02/19/economy/us-new-tariff-plans-trump-intl-hnk/index.html.
- Diederik Stadig, “Trump set to break WTO rules with potential pharma tariffs”, ING, Feb. 19, 2025, available at https://think.ing.com/snaps/trump-wto-tariffs-us-pharma/ and Mari Eccles, “Pharma braces for tariffs as Trump threatens to buck trade convention”, Politico EU, Feb. 28, 2025, available at https://www.politico.eu/article/pharmaceutical-industry-tariffs-donald-trump-trade-medicines-drugs-supply-chains/.
- World Trade Organization (WTO), “The process – Stages in a typical WTO dispute settlement case”, WTO website, available at https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s3p5_e.htm#:~:text=The%20period%20from%20the%20establishment,an%20average%20of%2012%20months.
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