U.S. Imposes 100% Tariffs on Pharmaceuticals... 15% for Korea, No Tariffs on Biosimilars

Trump Signs Tariff Order on Patented Pharmaceuticals and Ingredients

U.S. President Donald Trump has signed a proclamation imposing a 100% tariff on imported patented pharmaceuticals and their active ingredients, citing national security concerns. For pharmaceuticals originating from Korea, a 15% tariff rate will apply, while tariffs will remain exempt for biosimilars, which are Korea's main export items. As a result, the overall impact on the domestic industry is expected to be limited.

On April 2, the White House announced that President Trump would impose a 100% tariff on imported patented pharmaceuticals and related ingredients under Section 232 of the Trade Expansion Act. The measure is set to go into effect within 120 days for some large companies, and within 180 days for smaller companies.

According to an investigation by the U.S. Department of Commerce, as of last year, approximately 53% of patented pharmaceuticals distributed in the United States were manufactured overseas. Only 15% of patented active pharmaceutical ingredients (APIs) for the U.S. market were produced domestically. The Trump administration determined that this heightened reliance on imports could threaten national security by limiting access to essential medicines in the event of global supply chain disruptions.

However, differentiated tariffs will apply depending on trade agreements and each company's circumstances. Pharmaceuticals produced in Korea, the European Union (EU), Japan, Switzerland, and Liechtenstein will be subject to a 15% tariff. Products from the United Kingdom, which recently signed a separate pharmaceutical agreement, will be subject to an even lower tariff rate.

In addition, 13 companies—including AbbVie and Amgen—that have concluded Most-Favored-Nation (MFN) price agreements with the U.S. Department of Health and Human Services (HHS) and onshoring contracts with the Department of Commerce will benefit from a 0% tariff until January 20, 2029. Companies that have signed only onshoring contracts with the Department of Commerce will face a 20% tariff.

Generic pharmaceuticals, biosimilars, and related ingredients are currently excluded from the tariffs, with a reassessment scheduled in one year. Certain specialty drugs, such as orphan drugs, radiopharmaceuticals, and cell and gene therapies, will also be exempt from tariffs if they are supplied by trade agreement countries or are deemed urgently needed for public health reasons.

The Bioeconomy Research Center of the Korea Biotechnology Industry Organization stated, "This measure will result in a 15% tariff on Korean patented pharmaceuticals exported to the United States, which were previously exempt. However, since biosimilars—Korea's main export items—will remain tariff-free for at least one year, the overall impact will be limited." The center also added, "Contract Development and Manufacturing Organization (CDMO) products manufactured in Korea and exported to the U.S. at the request of U.S. companies may be recognized as U.S.-origin and thus be exempt from tariffs, but this will require final confirmation from the U.S. government."

This content was produced with the assistance of AI translation services.