Trump says pharma tariffs could eventually reach as much as 250%

President Donald Trump told CNBC’s “Squawk Box” on Tuesday that planned tariffs on pharmaceuticals imported into the U.S. could eventually reach as much as 250%, the best rate he has threatened to date.

He said he’ll initially impose a “small tariff” on pharmaceuticals, but then in a yr to a yr and a half “maximum,” he’ll raise that rate to 150% after which 250%.

The president has repeatedly threatened after which modified course on tariff proposals, so there is no guarantee he’ll eventually set pharmaceutical tariffs on the 250% rate. In early July, Trump had threatened 200% tariffs on pharmaceuticals.

The Trump administration in April initiated a so-called Section 232 investigation on pharmaceutical products. That is a legal authority that enables the secretary of Commerce to analyze the impact of imports on national security.

The tariffs are the president’s bid to incentivize drug corporations to maneuver manufacturing operations to the U.S. at a time when domestic drug production has shrunk dramatically over the previous few many years. Over the past six months, corporations like Eli Lilly and Johnson & Johnson have announced fresh U.S. investments to construct goodwill with the president.

“We wish pharmaceuticals made in our country,” Trump told CNBC.

The planned levies would deal a blow to the pharmaceutical industry, which has warned that the tariffs could drive up costs, deter investments within the U.S. and disrupt the drug supply chain, putting patients in danger. Drugmakers are already navigating the fallout from Trump’s drug pricing policies, which they argue threaten each their bottom lines and their capability to take a position in research and development.

That features Trump’s executive order in May that revives a controversial plan, the “most favored nation” policy, that goals to slash drug costs by tying the costs of some medicines within the U.S. to the significantly lower ones abroad.

On Tuesday, Trump told CNBC that he “invoked” the “most favored nations” policy and that it is going to have a “tremendous impact on the value of drugs.” But Trump has not officially implemented any changes from the manager order.

Trump last week sent letters to 17 drugmakers calling on them to commit to steps to lower U.S. drug prices by Sept. 29. That features agreeing to supply their full portfolio of existing medicines at the bottom price offered in other developed nations to each Medicaid patient, amongst other steps.

Some pharmaceutical corporations have said they’re reviewing the letters.