Sam Lowe, partner at Flint Global and Chatham House fellow, explains the U.S. move to impose a headline 100% tariff on imported pharmaceuticals. While the rate sounds draconian, dozens of exemptions—generic drugs, US‑origin products, fertility and nuclear medicines—carve out large swaths of the market. Determining the exact duty for any SKU now requires detailed knowledge of API origin, on‑shoring plans and pricing agreements.

Companies that have filed US‑approved onshoring plans face a provisional 20% duty until April 2, 2030, after which the rate jumps to the headline level. Those that also sign Most‑Favoured‑Nation pricing accords enjoy zero tariffs until January 2029, provided they meet the terms listed in Annex II. The UK‑US trade deal ties these exemptions to a three‑year commitment that all major British drugmakers must honour.

In practice the 100% headline serves as a bargaining chip rather than a blanket levy. By conditioning relief on on‑shoring and price‑matching, Washington creates a perpetual leverage machine that pressures firms to relocate production and lower prices for foreign health systems. The structure is likely to outlast the Trump era, cementing tariff threats as a long‑term tool in U.S. trade strategy.