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White House and European Union Announce Long-Awaited Details on Pharma Tariffs
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Key Takeaways
- The framework agreement imposes tariffs on EU imports, including pharmaceuticals, capped at 15%, with an MFN clause potentially reducing tariffs.
- President Trump has emphasized domestic pharmaceutical manufacturing, influencing the decision to impose unique tariffs on pharma goods.
A joint statement lays out the framework for a potential trade agreement.
The announcement provides details for a potential trade agreement with the EU.
The White House announced its plan for tariffs on imports from the European Union (EU).
In a joint statement,1 the White House and the EU announced the details of what is being called a framework for an agreement on reciprocal, fair, and balanced trade. While the agreement is wide reaching and impacts all goods being imported, pharmaceutical goods are subject to unique rules.
How much will pharma goods from the EU be taxed?
Broadly speaking, all imports from the EU will have a tariff placed on them that does not exceed 15%. However, there is a MFN clause, so some goods may have lower tariffs placed on them, depending on trade deals with other countries. The agreement does specify that the tariffs will not exceed 15%. Generic pharmaceuticals, their ingredients, and chemical precursors are included under this rule. This goes into effect September 1 of this year.
Pharmaceuticals in general will also be subject to the MFN rule and will not have tariffs that exceed 15%.
According to the announcement, the EU is expected to introduce the necessary legislative proposals in a timely manner, although a specific date is not set.
The agreement comes after months of speculation and contradictory statements, sometimes provided by President Trump himself. While broader tariffs have been a hotly debated topic since he took office, pharmaceuticals have been a uniquely complicated story. When the first round of tariffs were announced for countries around the world, pharmaceutical goods were not included, as if traditionally the case with tariffs.
However, President Trump announced in early February that separate tariffs would be placed on pharmaceuticals and that these goods would face their own unique trade requirements. One of the reasons the President provided for these unique tariffs was to promote investments in domestic manufacturing sites for pharma goods.
In April, the pharma industry once again avoided having tariffs placed on its imports. However, President Trump announced that pharma goods could face potential tariffs of up to 25% or higher. During a ceremony at the White House’s rose garden for the tariff announcement, Trump said, “The pharmaceutical companies are going to come roaring back, they’re coming roaring back, they’re all coming back to our country because if they don’t, they got a big tax to pay.”
A few days later, the President once again commented on his plan for pharmaceuticals, saying that specific details were coming shortly. At the time, he said, “We’re going to tariff our pharmaceuticals, and once we do that, they are going to come rushing back into our country, because we’re the big market. The advantage we have over everybody is that we’re the big market. So we’re going to be announcing very shortly a major tariff on pharmaceuticals, and when they hear that, they will leave China, they will leave other places, because most of their product is sold here and they’re going to be opening up their plants all over our country.”
In May, the President further complicated the situation by announcing his MFN order for pharmaceuticals, which said that drugs should be priced domestically to match the best price in other markets.
Later, in August, he added more confusion and stress to the situation by musing about placing tariffs of up to 250% on pharmaceutical goods. At the time, however, he said that the initial tariffs would be lower and it would be at least a year to a year-and-a-half before the larger tariffs were put in place.
With the agreement with the EU, however, it makes it clear that pharma goods are on the negotiating table and that rules can be put in place to prevent the massive potential tariffs that have been promised.
Sources
- Joint Statement on a United States-European Union Framework on an Agreement on Reciprocal, Fair, and Balanced Trade. The White House. August 21, 2025. https://www.whitehouse.gov/briefings-statements/2025/08/joint-statement-on-a-united-states-european-union-framework-on-an-agreement-on-reciprocal-fair-and-balanced-trade/
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