President Donald Trump is again raising the tariff stakes on pharmaceutical companies. He told CNBC’s “Squawk Box” on Aug. 5 that “within the next week or so” he planned tariffs on pharmaceuticals imported into the United States that could eventually climb to 250%, the highest rate he has threatened thus far.
The president said he will initially impose a “small tariff” on pharmaceuticals, “but in one year, one-and-a-half years maximum, it’s going to go to 150%, and then it’s going to go to 250%, because we want pharmaceuticals made in our country.”
The president’s tariff threats have been a hallmark of his presidency since he took office in January. He’s repeatedly threatened and then shifted direction on tariff proposals. In early July, the president had threatened 200% tariffs on pharmaceuticals.
Trump is using tariffs to convince drug companies to move manufacturing operations to the U.S. at a time when domestic drug production has shrunk over the last few decades. Over the last six months, some pharmaceutical companies, including some with a base or presence in New Jersey, have announced new U.S. investments.
On May 5, Trump signed an executive order intended to expedite the approval process for pharmaceutical plants in the U.S., as part of new regulations to support domestic manufacturing.
In March, New Brunswick-based Johnson & Johnson “announced manufacturing, research and development, and technology investments of more than $55 billion in the United States over the next four years.” Company leaders said President Trump’s first term in office, particularly the 2017 Tax Cuts and Jobs Act, played a role in their decision.
In the spring, Swiss pharmaceutical company Novartis said it plans to invest $23 billion over five years in construction and expansion of 10 U.S. facilities, including one in Millburn. The company said the planned increase would create 1,000 jobs at Novartis and about 4,000 U.S. jobs overall.
The company plans to expand on its current manufacturing, research and technology presence across the U.S. with 10 facilities, including seven new ones. Novartis has more than 3,000 employees working at its campus in East Hanover, and 12,000 employees nationwide.
In April, it was reported that Rahway-based pharmaceutical giant Merck was investing $1 billion in what company executives said was a continued commitment to growing investments in United States manufacturing and jobs.
Also in the spring, Princeton-based Bristol Myers Squibb said in a Reuters story that it plans to invest $40 billion in the U.S. over the next five years to bolster its research and manufacturing capabilities.
