A Tariff Pill: Why India, US, and China Hold the Key to Affordable Medicines

Donald Trump is back on the campaign trail, promising to slash drug prices. "I will get drug prices way down," he declared this year.

- RAKESH K. CHITKARA

Few Americans would argue with the urgency of affordable medicine, especially as healthcare costs continue to burden families and government programs alike.

Yet, in April, President Trump imposed a sweeping 10% tariff on all imports, including pharmaceuticals and medical supplies, under the International Emergency Economic Powers Act. Simultaneously, his administration launched a national security investigation under Section 232 that could impose tariffs of up to 25% on finished drug products and active pharmaceutical ingredients (APIs). Generics, the backbone of affordable American medicine, are squarely in the crosshairs of these trade policies.

At first glance, tariffs appear as a tough stance against foreign suppliers, a way to protect American jobs and industries. But the reality is far more complex and, frankly, dangerous. These tariffs threaten to destabilize a drug supply chain that millions of Americans rely on daily and leave the United States far more exposed to future shocks.

India plays an outsized role in America's generic drug supply. According to the U.S. Food and Drug Administration (FDA), Indian manufacturers supply roughly 40% of the generics consumed in the United States. From antibiotics to blood pressure medicines to cancer therapies, these affordable drugs keep healthcare accessible for millions of patients and help contain the enormous costs borne by Medicare and Medicaid.

But India's generic industry has a critical vulnerability: it remains heavily dependent on China for its raw ingredients. Approximately 70% of the active pharmaceutical ingredients (APIs)—the chemical building blocks of all medicines—used by Indian generic producers are imported from China, according to India's Ministry of Commerce. This dependency is a geopolitical and economic risk waiting to materialize.