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Economy

Will Trump’s 100% Tariffs on Pharma Products Impact EU’s Trade Deal?

Trump imposed 100% tariffs on pharma imports; EU expects exemption due to a trade deal capping duties at 15%.

byAndres Castro

September 28, 2025, 6:18 PM

Executive Summary

President Trump announced 100% tariffs on imported branded or patented pharmaceutical products, effective October 1, 2025, aiming to incentivize domestic manufacturing.

The European Commission remains confident that EU pharmaceutical producers will be exempt from these 100% tariffs, asserting a summer trade deal caps duties on EU goods at 15%.

The EU’s confidence is bolstered by the US recently reducing duties on EU cars to 15%, aligning with the trade agreement, though broader negotiations continue on other tariffs like steel and aluminium.

The Story So Far

President Trump’s announcement of 100% tariffs on imported pharmaceutical products, effective October 2025, aims to incentivize domestic manufacturing in the US. However, the European Union is confident its producers will be exempt from these high tariffs, citing a trade deal concluded with Washington this summer that established a 15% tariff ceiling on EU goods, a confidence bolstered by recent US reductions in other tariffs in line with the agreement. This dispute highlights the ongoing, complex trade negotiations between the US and the EU, where some tariffs remain in place while others are being adjusted.

Why This Matters

Donald Trump’s announcement of 100% tariffs on pharmaceutical imports, effective October 2025, aims to incentivize domestic production, potentially reshaping US drug supply chains and affecting consumer prices. However, the European Commission expects EU pharmaceutical producers to be largely exempt due to a prior trade deal, capping their tariffs at 15% and underscoring the critical role of existing agreements in mitigating broader protectionist measures and the ongoing complexities of US-EU trade relations.

Who Thinks What?

President Trump announced the imposition of 100% tariffs on imported branded or patented pharmaceutical products, effective October 1, 2025, unless companies establish manufacturing plants in the US, aiming to incentivize domestic production.

The European Commission confidently asserts that European Union pharmaceutical producers will be exempt from these higher tariffs, believing a trade deal concluded with Washington caps duties on EU goods at 15% and expects the US to uphold this commitment.

Ireland, a significant EU pharmaceutical producer, responded cautiously but supported the EU’s position, underscoring that a joint EU-US statement from August 21 explicitly caps any new US tariffs on pharmaceuticals at 15% for EU exports.

US President Donald Trump announced on Thursday the imposition of 100% tariffs on pharmaceutical products imported into the United States, effective October 1, 2025. However, the European Commission remains confident that European Union pharmaceutical producers will be exempt from these higher tariffs, asserting that a trade deal concluded with Washington this summer will cap duties on EU goods at 15%.

Trump’s Tariff Announcement

Trump’s announcement, made via social media, specified that the 100% tariff would apply to “any branded or patented pharmaceutical product” unless the importing company constructs its manufacturing plant in America. This policy aims to incentivize domestic pharmaceutical production.

The tariffs are slated to take effect on October 1, 2025, marking a significant shift from the previous 0% tariff rate on EU pharmaceutical products entering the US market.

EU’s Confidence in Existing Deal

The European Commission expressed strong belief that the EU pharmaceutical industry will avoid the newly announced 100% tariff rate. It maintains that the sector remains covered by a trade agreement reached with the US in July, which established a 15% tariff ceiling on EU imports.

Olof Gill, EU Commission deputy spokesperson, stated on Friday that this “clear all-inclusive 15% tariff ceiling for EU exports represents an insurance policy that no higher tariffs will emerge for European economic operators.” Gill emphasized that the EU is the only trade partner to achieve this outcome with the US, and the Commission expects the US to “promptly ensure” the tariff rate on pharmaceuticals does not exceed 15% for EU goods.

Member State Response and Broader Context

Ireland, home to a significant pharmaceutical industry heavily exposed to US trade, responded cautiously to Trump’s announcement. Tánaiste Simon Harris, Ireland’s deputy prime minister, acknowledged the need to study the impact. However, he underscored that a joint EU-US statement from August 21 “made absolutely clear that any new tariffs announced by the US on pharmaceuticals under its Section 232 investigation would be capped at 15% for pharma products being exported by the EU.”

The EU’s confidence is bolstered by recent actions from the US, which this week reduced its duties on EU cars from 27.5% to 15%, aligning with the summer trade agreement after several weeks of delay. This move is seen by EU officials as an indication that the US is upholding its commitments under the deal.

Ongoing Trade Negotiations

Despite progress in some areas, broader trade negotiations between the EU and the US are ongoing. The US continues to apply 50% tariffs to EU steel and aluminium. A joint statement in late August indicated hopes for an agreement on tariff rate quotas for these sectors.

The Commission is also actively pursuing more exemptions beyond those already granted by the White House for aircraft, certain generics and chemicals, and specific natural resources. Wines and spirits have emerged as a top priority for the Commission, following significant pressure from France, Italy, and Spain to secure relief for their respective industries.