Input Stories

The Trump administration released new tariffs on certain patented pharmaceutical imports and adjusted steel, aluminum and copper imports and derivative products, a year after Liberation Day (Reuters, subscription).

New tariffs on pharmaceuticals: The president signed a proclamation that directs agencies to continue negotiations with companies related to domestic pricing, impose “significant tariffs on pharmaceuticals and pharmaceutical ingredients,” and grant “preferential” tariff treatment to companies that commit to moving production to the United States. The details:

• A 100% tariff will be applied on patented pharmaceuticals not made in the U.S. and not covered by drug pricing agreements.
• A reduced 20% tariff will be applied to pharmaceutical companies moving manufacturing to the U.S.
• A 10% to 15% tariff will be applied to the European Union, Japan and Switzerland due to existing trade agreements. The U.K. has a separate deal.
• A 0% tariff until January 20, 2029, will apply to pharmaceutical companies who have or will soon have “fully executed” onshoring agreements and have signed most-favored-nation pricing agreements with the U.S. Department of Health and Human Services.
• Generic pharmaceuticals are exempt from tariffs for one year.

U.S. and U.K. formalize a pharmaceutical deal: The U.S. and Britain also finalized a pharmaceutical pricing deal—building on the December statement that guarantees zero tariffs on British-made pharmaceuticals for at least three years as Britain builds out production in the United States ( Reuters, subscription).

Metals tariffs get a rework: The president also signed a proclamation to adjust metal tariffs and modify the scope of derivative articles subject to Section 232 tariffs enacted through aluminum, steel and copper proclamations. Here’s what changed:

• This move keeps in place the tariff of 50% now assessed on the full value of articles made entirely or “almost entirely” of aluminum, steel or copper.
• Derivative articles “substantially made” of aluminum, steel or copper will be assessed a tariff of 25% of their full value.
• Certain metal-intensive industrial and power-grid equipment will be temporarily reduced from 50% to 15% through 2027 to “accelerate the massive industrial base buildout currently underway across the United States.”
• The proclamation lists products that will no longer be subject to Section 232 metal tariffs if they do not contain any “sufficient” aluminum, steel or copper content.

Lower rates will be applied for certain U.S. or U.K. origin content.

The NAM responds: “Manufacturers are innovators,” NAM President and CEO Jay Timmons said in a statement on Thursday . “We work to supply the world with the medicines and therapies to ensure a healthier future; the automobiles and aircraft that move people; home appliances that make our lives more comfortable; and the food that provides nutrition to our families. From the steel, aluminum and copper that form the backbone of modern manufacturing to the finished products that drive our economy and lifesaving pharmaceuticals that they produce, this is what America’s manufacturers do.”

• “Manufacturers share the president’s objectives of stronger economic growth, increased investment, more jobs and higher wages in the U.S.—and we are committed to working with the administration to make that vision a reality. Tariffs can be effective when they are used strategically and target bad actors who don’t play by the rules. Certainty is critical for manufacturers to achieve those objectives.”

Recall the NAM Accelerator Program: “Investments are decades-long commitments to the people we hire and the communities we serve,” Timmons said, adding that “even with every manufacturer working at full capacity—every machine running, every job filled—the industry can only produce 84% of the inputs manufacturers need to build, modernize and operate or facilities to increase production and output,” meaning “at least 16% of critical manufacturing imports must be imported to manufacture more here in the U.S.”

• “That’s why manufacturers have offered practical pro-growth solutions through the NAM’s Manufacturing Investment Accelerator Program ,” he continued.
• “The program would provide a speed pass for critical inputs we do not make domestically, but which are needed to expand production in the U.S.—without adding cost burdens—while rewarding manufacturers who invest, expand and create new jobs here at home.”

What should come next: Timmons credited the administration and Congress for their work in “renewing and strengthening the 2017 Trump tax reforms, advancing regulatory modernization and working to achieve American AI and energy dominance—foundations for the future of manufacturing in the U.S.”

• When policymakers build on this progress—ensuring certainty and lowering the cost of doing business—manufacturers will deliver the greatest manufacturing era in American history,” he concluded.