America will soon impose “major tariffs” on pharmaceutical imports from other countries, Donald Trump has said.

The president revealed his administration’s plan at a National Republican Congressional Committee dinner on Tuesday.

Newsweek has contacted the FDA, via online contact form, for comment.

Why It Matters

The world is still reeling from Trump’s sweeping “Liberation Day” tariffs, revealed in the Rose Garden last week. These included a 34 percent “reciprocal” tariff on China, in addition to a 10 percent baseline tariff.

After China retaliated, in actions that included a 34 percent tariff against the U.S., Trump said he would put a further 50 percent tariff on Chinese imports if Beijing did not withdraw its tariff by Wednesday.

That deadline passed and there is now a 104 percent tariff on imports from China.

Trump also seems to be targeting China with his pharmaceutical tariff plans, saying that he hopes pharmaceutical companies will leave China as a result.

What To Know

Trump said at the dinner: “We’re going to be announcing very shortly a major tariff on pharmaceuticals. And when they hear that, they will leave China. They will leave other places because they have to sell—most of their product is sold here and they’re going to be opening up their plants all over the place.”

Historically, pharmaceutical drugs have been manufactured in the U.S., but this is no longer the case, with only 28 percent of manufacturers of active pharmaceutical ingredients (APIs) in the country as of August 2019, according to the U.S. Food and Drug Administration (FDA).

Some 72 percent of manufacturers supplying the U.S. market were overseas, with 13 percent in China.

Reasons for this shift “include the fact that most traditional drug production processes require a large factory site, often have environmental liabilities and can utilize a low-cost labor force,” the FDA said.

It cited a 2009 World Bank paper called “Exploratory Study on Active Pharmaceutical Ingredient Manufacturing for Essential Medicines,” which concluded that “if a typical Western API company has an average wage index of 100, this index is as low as 8 for a Chinese company and 10 for an Indian company.”

What People Are Saying

Donald Trump defended his recent economic moves at the dinner, saying: “Companies are pouring back into our country with plants. … They’ve stopped building in Mexico, four or five plants, and they’re all coming into the United States. I know what the hell I’m doing. I know what I’m doing, and you know what I’m doing, too. That’s why you vote for me.”

White House press secretary Karoline Leavitt spoke to reporters on Tuesday about trade negotiations with individual countries, saying: “We are going to prioritize our allies and our partners around the world first when it comes to these negotiations. And the trade team will be divvying them up again to make tailor-made trade deals around the world.”

Conference Board economist Erin McLaughlin told The Financial Times: “It will take between three and 10 years in most cases to build a new manufacturing facility in the U.S. Everything takes time before you can get that picture of a congressman with a shovel in their hand.”

What Happens Next

Trump’s administration is yet to announce the details of his pharmaceutical tariff plans. Meanwhile, the long-term fallout of Trump’s existing tariff announcements is yet to be seen.