The Donald Trump administration has decided to impose a 100% tariff on pharmaceuticals not produced in the United States, while applying a separate 15% rate to South Korea. Biosimilars, a key Korean export, will remain duty-free. South Korea’s pharmaceutical and biotech industry said the decision eases uncertainty, but warned that companies still need global strategies as supply chains shift.
President Donald Trump signed a proclamation on April 2 (local time) imposing a 100% tariff on pharmaceuticals not made in the United States. However, South Korea, Japan and Europe — which have separate trade agreements with the United States — will face a 15% rate, while the United Kingdom will be subject to 10%.
Trump has repeatedly raised the prospect of drug tariffs since early this year, pressuring the industry. In August last year, he said rates could rise as high as 250%. Two months later, in October, he cited a 100% tariff, fueling uncertainty. The latest decision is seen in the industry as removing that tariff risk.
Companies said generics and biosimilars were excluded from the tariff, and that Korean pharmaceuticals will receive treatment close to most-favored-nation status, giving them an edge over products from countries facing the full 100% rate.
The Bioeconomy Research Center at the Korea Bio Association said the measure will impose a 15% tariff on Korean patented drugs that previously entered the U.S. duty-free, but the impact should be limited because biosimilars — a major export — will remain duty-free for at least one year.
It added that contract development and manufacturing (CDMO) volumes produced in South Korea at the request of U.S. clients may be recognized as U.S.-made and potentially qualify for duty-free treatment, though final confirmation from the U.S. government is needed. Over the medium to long term, it said, diversification will be essential, including reshaping production and supply chains in the United States and expanding into non-U.S. markets.
The U.S. government’s plan to reassess in one year the exclusions for generics, biosimilars and related raw materials could remain a burden, the industry said.
A biotech industry official said companies were relieved after Trump’s tariff threats continued from last year, but added that firms must prepare thoroughly for the review in a year and pursue diversification as global supply chains are reorganized.
President Donald Trump signed a proclamation on April 2 (local time) imposing a 100% tariff on pharmaceuticals not made in the United States. However, South Korea, Japan and Europe — which have separate trade agreements with the United States — will face a 15% rate, while the United Kingdom will be subject to 10%.
Trump has repeatedly raised the prospect of drug tariffs since early this year, pressuring the industry. In August last year, he said rates could rise as high as 250%. Two months later, in October, he cited a 100% tariff, fueling uncertainty. The latest decision is seen in the industry as removing that tariff risk.
Companies said generics and biosimilars were excluded from the tariff, and that Korean pharmaceuticals will receive treatment close to most-favored-nation status, giving them an edge over products from countries facing the full 100% rate.
The Bioeconomy Research Center at the Korea Bio Association said the measure will impose a 15% tariff on Korean patented drugs that previously entered the U.S. duty-free, but the impact should be limited because biosimilars — a major export — will remain duty-free for at least one year.
It added that contract development and manufacturing (CDMO) volumes produced in South Korea at the request of U.S. clients may be recognized as U.S.-made and potentially qualify for duty-free treatment, though final confirmation from the U.S. government is needed. Over the medium to long term, it said, diversification will be essential, including reshaping production and supply chains in the United States and expanding into non-U.S. markets.
The U.S. government’s plan to reassess in one year the exclusions for generics, biosimilars and related raw materials could remain a burden, the industry said.
A biotech industry official said companies were relieved after Trump’s tariff threats continued from last year, but added that firms must prepare thoroughly for the review in a year and pursue diversification as global supply chains are reorganized.
* This article has been translated by AI.
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