While the pharmaceutical industry is currently exempt from US tariffs, there is an increased risk to the stability of the pharmaceutical supply chain. With US President Donald Trump leaning towards implementing additional tariffs on the pharmaceutical sector, there is potential to disrupt drug development costs and drug prices, with any tariffs increasing the import costs of many raw materials and active pharmaceutical ingredients, according to GlobalData, a leading data and analytics company.
According to GlobalData’s 2025 report, China is currently the world’s second-largest single country market, following the US, with pharmaceutical market sales expected to hit 2trn yuan ($273.9bn) in 2025.
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On 4 April 2025, Trump imposed an additional 34% tariff on all Chinese imports, with China responding with a reciprocal 34% tariff on all goods imported from the US. The Chinese government has also subjected an additional 16 US organisations and companies to trade sanctions or export controls, as well as adding 11 companies to the unreliable entity list on 5 April 2025, limiting investment activities in China.
The volatile relations between the US and China are expected to significantly affect the international pharmaceutical market, with any future-imposed pharmaceutical tariffs potentially resulting in increased costs of drugs, limited patient availability, and logistical difficulties, with several organisations considering relocation to tackle this issue. On 9 April 2025, China’s Ministry of Finance announced an 84% retaliatory tariff on all goods imported from the US to take place from 10 April 2025, up from 34%, in response to Trump’s recent levy hikes. This follows the US’ imposition of a 125% tariff on Chinese imports on 9 April 2025, up from 104%, accelerating the trade war between the two nations.
Due to the current lack of exemptions for the pharmaceutical industry by the Chinese government, imported pharmaceutical products and vaccines will be subjected to the additional tariffs. Trump has also stated that the imposed tariffs on the pharmaceutical industry will cause organisations to reshore their manufacturing to the US, with no specific timeline on when the pharmaceutical tariffs are to be imposed.
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By GlobalData