US agrees to cap tariffs on European drug imports: 3 tariff updates

The U.S. has reached an agreement with the European Union to cap levies on pharmaceutical exports to 15%, according to a joint statement released Aug. 20. 

The announcement sheds more light on a trade agreement the two struck in July, making clear that tariffs on drug imports and semiconductors — widely used materials in medical devices — from Europe will be capped at 15%. This ceiling will remain, should the Trump administration move forward with broader sector tariffs on drug imports, which the president has threatened could exceed 200%.

Taken together, the EU’s 27-member countries make up the U.S.’ largest trading partner. It is a major source of drug imports for the U.S.

“This is a serious, strategic deal – and we are fully behind it,” Maroš Šefčovič, a European trade commissioner, said in a statement on the agreement. “A wide range of sectors, including strategic industries such as cars, pharmaceuticals, semiconductors, and lumber, stand to benefit from the deal.”

Effective Sept. 1, the U.S. will also revert to standard Most Favored Nation tariff rates for European generic pharmaceutical imports and their ingredients. That means generics will be taxed only at the baseline rates set under World Trade Organization rules. Branded drugs, by contrast, will remain subject to the new 15% tariff ceiling.

Two more recent tariff updates:

1. Expanded scope of steel and aluminum tariffs: On Aug. 19, the Trump administration widened the 50% tariff on steel and aluminum to cover more than 400 additional product categories, including materials used in medical devices and pharmaceutical manufacturing. The expanded list could affect at least $320 billion worth of imports, adding cost pressure for devicemakers and drug companies, according to supply chain experts.

2. Health systems navigate tariffs: Health systems including Renton, Wash.-based Providence and Louisville, Ky.-based Baptist Health are expanding supply chain monitoring and modeling efforts to manage potential cost increases related to shifting trade policies, leaders recently told Becker’s. Providence has developed a tariff projection model and is closely tracking inventory categories most at risk, such as cardiac catheters and GI devices. Meanwhile, Baptist Health is focusing on supplier engagement, operational efficiency and sourcing strategies to minimize patient impact.

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