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Trump announced a 100% tariff on generic drugs in two years. What impact will it have on China’s pharmaceutical exports?

2026-07-24·newswire-us-stock-000512
Trump announced a 100% tariff on generic drugs in two years. What impact will it have on China’s pharmaceutical exports?

On July 21, local time, U.S. President Trump posted on social media that starting from August 1, 2026, all generic drugs imported into the United States will continue to be subject to zero tariffs for the next two years.

After the two-year period expires, the relevant products will be subject to 100% tariff for one year; thereafter, the tariff will be further increased to 200%. Trump stated that the purpose of implementing this policy is to promote the return of generic drug production to the United States.

Companies that fail to build production plants and related equipment in the United States within the specified period will face tariff penalties. The current policies for patented drugs, branded drugs and innovative drugs will continue to remain unchanged due to their good implementation effects.

Once this policy is implemented, what impact will it have on China's pharmaceutical exports? From the current point of view, China's exports to the United States are mainly APIs, and the export value of APIs is much greater than the export value of Western medicine preparations.

For example, in 2025, the export value of APIs will be 3.5 times the export value of Western medicine preparations. According to data previously released by the China Chamber of Commerce for Import and Export of Medicines and Health Products, India and the United States remain China's top two export markets for APIs and intermediates.

In 2025, China's exports to India will be US$6.26 billion, a year-on-year increase of 2.1%. China's exports to the United States were US$4.07 billion, a year-on-year decrease of 9.9%. Looking at exports of Western pharmaceutical preparations, China's exports to the United States in 2025 will be US$1.162 billion, a year-on-year increase of 1.01%.

Affected by the additional tariffs, China's exports of preparations to the United States in 2025 accounted for 13.14% of preparation exports, a decrease of about 3.4 percentage points from 2024.

It is worth mentioning that from the perspective of China’s Western pharmaceutical preparations export markets, exports to the EU (excluding the United Kingdom) still account for the highest proportion, accounting for 41.06% of the export value, while North America accounts for 13.57% of the export value.

A researcher who is engaged in international cooperation in Chinese medicine told China Business News that at this stage, China's pharmaceutical exports to the United States are still dominated by APIs, while innovative drugs are mainly traded in services, and the relative share of generic drug exports lags behind.

"It should be noted that the global market, especially the U.S. pharmaceutical market, is dependent on Chinese APIs and it is difficult to replace them in the short term, otherwise it will lead to skyrocketing drug prices and shortages. However, there is also a certain pressure on generic drug products exported to the United States.

Although it is controllable in the short term, it will be under pressure in the medium and long term." This person also believes that there are time differences and variables in the implementation of the U.S. tax increase policy.

Judging from the time difference, the policy is preset to impose taxes only after the expiration of two years from August 1, 2026, leaving buffer time for companies to respond in the next step. Judging from the variables, the policy may fluctuate with the domestic political situation in the United States.

"The policy is scheduled to take effect in August 2028, spanning the U.S. election cycle. There are major variables in whether the subsequent government will continue it and whether it will exempt key varieties due to drug price protests." The person said that there is still uncertainty about the actual implementation time. The U.S.

White House has clearly set a one-year observation period/evaluation period for generic drugs and APIs. It is not iron-clad that it will be implemented after two years. It may be postponed at any time for reasons such as "supply chain security" or due to diplomatic or supply pressure.

This policy will also face realistic challenges at the implementation level. The U.S.'s own medical system relies heavily on cheap generic drugs and imported APIs. If the imposition of 100% to 200% tariffs actually triggers domestic drug shortages and increases in prices, the policy will most likely be exempted or implemented at a discount.

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Trump announced a 100% tariff on generic drugs in two years. What impact will it have on China’s pharmaceutical exports?

[What impact will Trump’s announcement of 100% tariffs on generic drugs in two years have on China’s pharmaceutical exports?] A researcher engaged in international cooperation in Chinese medicine told reporters that at this stage, China’s pharmaceutical exports to the United States are still dominated by APIs, while innovative drugs are mainly traded in services, and the relative share of generic drug exports lags behind. "It should be noted that the global market, especially the U.S. pharmaceutical market, is dependent on Chinese APIs and it is difficult to replace them in the short term, otherwise it will lead to skyrocketing drug prices and shortages. However, there is also a certain pressure on generic drug products exported to the United States. Although it is controllable in the short term, it will be under pressure in the medium and long term."

On July 21, local time, U.S. President Trump posted on social media that starting from August 1, 2026, all generic drugs imported into the United States will continue to be subject to zero tariffs for the next two years. After the two-year period expires, the relevant products will be subject to 100% tariff for one year; thereafter, the tariff will be further increased to 200%. Trump stated that the purpose of implementing this policy is to promote the return of generic drug production to the United States. Companies that fail to build production plants and related equipment in the United States within the specified period will face tariff penalties. The current policies for patented drugs, branded drugs and innovative drugs will continue to remain unchanged due to their good implementation effects. Once this policy is implemented, what impact will it have on China's pharmaceutical exports? From the current point of view, China's exports to the United States are mainly APIs, and the export value of APIs is much greater than the export value of Western medicine preparations. For example, in 2025, the export value of APIs will be 3.5 times the export value of Western medicine preparations. According to data previously released by the China Chamber of Commerce for Import and Export of Medicines and Health Products, India and the United States remain China's top two export markets for APIs and intermediates. In 2025, China's exports to India will be US$6.26 billion, a year-on-year increase of 2.1%. China's exports to the United States were US$4.07 billion, a year-on-year decrease of 9.9%. Looking at exports of Western pharmaceutical preparations, China's exports to the United States in 2025 will be US$1.162 billion, a year-on-year increase of 1.01%. Affected by the additional tariffs, China's exports of preparations to the United States in 2025 accounted for 13.14% of preparation exports, a decrease of about 3.4 percentage points from 2024. It is worth mentioning that from the perspective of China’s Western pharmaceutical preparations export markets, exports to the EU (excluding the United Kingdom) still account for the highest proportion, accounting for 41.06% of the export value, while North America accounts for 13.57% of the export value. A researcher who is engaged in international cooperation in Chinese medicine told China Business News that at this stage, China's pharmaceutical exports to the United States are still dominated by APIs, while innovative drugs are mainly traded in services, and the relative share of generic drug exports lags behind. "It should be noted that the global market, especially the U.S. pharmaceutical market, is dependent on Chinese APIs and it is difficult to replace them in the short term, otherwise it will lead to skyrocketing drug prices and shortages. However, there is also a certain pressure on generic drug products exported to the United States. Although it is controllable in the short term, it will be under pressure in the medium and long term." This person also believes that there are time differences and variables in the implementation of the U.S. tax increase policy. Judging from the time difference, the policy is preset to impose taxes only after the expiration of two years from August 1, 2026, leaving buffer time for companies to respond in the next step. Judging from the variables, the policy may fluctuate with the domestic political situation in the United States. "The policy is scheduled to take effect in August 2028, spanning the U.S. election cycle. There are major variables in whether the subsequent government will continue it and whether it will exempt key varieties due to drug price protests." The person said that there is still uncertainty about the actual implementation time. The U.S. White House has clearly set a one-year observation period/evaluation period for generic drugs and APIs. It is not iron-clad that it will be implemented after two years. It may be postponed at any time for reasons such as "supply chain security" or due to diplomatic or supply pressure. This policy will also face realistic challenges at the implementation level. The U.S.'s own medical system relies heavily on cheap generic drugs and imported APIs. If the imposition of 100% to 200% tariffs actually triggers domestic drug shortages and increases in prices, the policy will most likely be exempted or implemented at a discount.

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