- Trump’s first day in office on Jan. 20 included proposed tariffs on Canada and Mexico.
- Trump’s tariff plans could raise the costs of some drugs for Americans.
- Additionally, Trump said during the campaign that he would impose a 60% tariff on Chinese imports.
Tariffs are now a central feature of President Donald Trump’s second-term agenda — and they could have a significant impact on what Americans pay for some drugs.
In his inaugural address and executive orders on Day One, the president detailed his plans to impose comprehensive tariffs on foreign goods, including a 25% tariff on Mexico and Canada. Trump said the tariffs could start on February 1. It follows his tariff proposals from the campaign trail, including a 60% tariff on imports from China.
Several trade policy experts previously told Business Insider that sweeping tariffs on major trading partners like Mexico and Canada could raise the prices of goods imported from those countries. This could also extend to major medical drugs such as pain relievers, antibiotics and cancer treatments, some of which are used in the US and manufactured abroad.
Countries like China, Canada, and Mexico not only manufacture prescription and over-the-counter drugs, but they also supply drug ingredients. In many cases, foreign-made drugs are more affordable than those made directly in America — but prices and access can vary with fees.
Trump has previously denied that his tariff policies will raise prices for Americans. Trump’s press team did not immediately respond to a request for comment from the BI.
What the fee means for your drug costs
Under Trump’s tariff plans, commonly used medications could become more expensive. According to the nonprofit KFF, importing some drugs or pharmaceutical ingredients from other countries has made some drugs more affordable in the U.S. than if they were made domestically because of lower production costs and cheaper labor.
In 2023, Mexico exported 165 of the 350 pharmaceutical products and drug ingredients designated as critical by the International Trade Administration. Although it was a small part of America’s total pharmaceutical imports – about 1.5%, per nonpartisan policy research firm Wilson Center – Mexico supplied key ingredients for drugs such as pain relievers and antibiotics. Major pharmaceutical and vaccine companies such as Pfizer and AstraZeneca also have operations in Mexico.
Canada also makes some generic forms of over-the-counter and prescription drugs, such as pain relievers. According to the Census Bureau, the US imported about $5.8 billion in pharmaceuticals in 2023.
Some states, such as Florida, have previously proposed importing some prescriptions from Canada to increase affordability. The FDA signed off on imports from Canada to Florida of a variety of drugs, including those used to treat HIV, AIDS and diabetes, and other states are working to get approval to import drugs from Canada in bulk to lower the high prices.
Trump proposed even tougher tariffs on China, which could affect drug prices. A 2023 report by the policy analysis firm Atlantic Council found that, between 2020 and 2022, US imports of Chinese pharmaceuticals increased by more than $8 billion, and China remains one of America’s top medical suppliers. China produces many health care products used by Americans such as pain relievers, cardiovascular drugs, cancer treatments and immunosuppressants, cold and cough medicines, antibiotics and bandages.
Tariffs and trade restrictions on foreign pharmaceuticals can also lead to higher prices and drug shortages if the US is unable to produce cheaper alternatives. Trump has suggested implementing a “universal tariff” on all imported goods, which could affect other major drug suppliers, such as Ireland, Germany, Switzerland and India.
Details are unclear on exactly how Trump will impose these tariffs, and the legal authority he uses will likely determine how quickly the U.S. could see commodity prices change. However, tariffs are not the only way Americans’ health care can be affected. On Monday, Trump signed a series of executive orders — some related to health care — including plans to pursue actions that will “eliminate unnecessary administrative costs and rent-seeking practices” that drive up health care costs.
Are you changing the way you handle health care costs with the new Trump administration? If so, get in touch allisonkelly@businessinsider.com AND asheffey@businessinsider.com.
