In 2025, the United States had a $112 billion trade deficit in pharmaceutical products, which the Trump administration has suggested it might try to equalize through tariffs. The United States is the world’s largest importer of pharmaceuticals and the second-largest exporter.
The countries with which the United States runs the largest trade deficits in pharmaceutical products are Ireland, Switzerland, Germany, India, and Singapore.
On April 2, the Trump administration announced tariffs of up to 100% on imported patented medicines, aimed at pushing drugmakers to manufacture more in the U.S. Most major pharmaceutical companies already cut deals with the administration and will face little to no tariffs, so the levies will primarily hit smaller drug and ingredient makers. Tariffs on drugs from countries that struck trade deals with the White House, including the EU, Japan, Liechtenstein, South Korea, and Switzerland, are capped at 15%, and products from the U.K. will be subject to a lower rate. Generic drugs are exempt but will undergo another review within one year. Large-company tariffs kick in after 120 days and smaller company tariffs after 180.
The following companies have signed an MFN agreement with the administration:
- Amgen [NASDAQ:AMGN]
- Boehringer Ingelheim
- Bristol Myers Squibb [NYSE:BMY]
- Genentech, subsidiary of Roche, [SIX:ROG]
- Gilead Sciences [NASDAQ:GILD]
- GSK [LSE:GSK]
- Merck [NYSE:MRK]
- Novartis [SIX:NOVN]
- Sanofi [EPA:SAN]
- Pfizer [NYSE:PFE]
- Eli Lilly [NYSE:LLY]
- Novo Nordisk [CPH:NOVO B]
- AstraZeneca [LSE:AZN]
- EMD Serono [subsidiary of Merck KGaA, ETR:MRK]
Editor’s note: Pharmaceutical products, for the purpose of this article, are encompassed in HTS groups 30.01, 30.02, 30.03, and 30.04, which include medicaments and immunological products. The data do not include supporting medical products used for diagnosis, surgery, clinical trials, or patient care.
Where does the U.S. import pharmaceuticals from?
The United States imports pharmaceutical products from 100 countries and exports them to 191 countries. It has a pharmaceutical trade deficit with 37 countries and a surplus with 155. Despite that, in 2025, the United States had a trade deficit of $112 billion in pharmaceutical products, a decrease of roughly $3 billion from 2024
In 2025, the largest U.S. trade deficit in pharmaceutical products was with Ireland, at -$47 billion, followed by Switzerland at -$16 billion.
The U.S. trade deficit in pharmaceuticals has grown at an average annual rate of 14%, from $11.6 billion in 2004 to $112 billion in 2025. U.S. drug exports shot up 46% in 2021 amid the COVID-19 pandemic, but annual growth returned to levels closer to average in the following years.
The table and map above show the U.S. pharmaceutical trade balance with every country in 2024 and 2025.
U.S. pharmaceutical trade with Ireland
Pharmaceuticals are Ireland's top export. The country is the third-largest pharmaceutical exporter in the world, and the United States is its top export market. In 2025, the U.S. imported $42 billion worth of pharmaceuticals from Ireland and exported roughly $5 billion, leaving it with a $37 billion trade deficit in pharmaceuticals.
Some of the largest pharmaceutical companies have longstanding operations in Ireland, including Pfizer, Lilly, and Amgen. Those companies and others have set up shop in Ireland to take advantage of the country’s low corporate tax rate and competitive research and development incentives.
U.S. pharmaceutical trade with Switzerland
The U.S. exported $3 billion worth of drugs to Switzerland in 2025 and imported $19 billion, resulting in a $16 billion deficit.
Switzerland has attracted life sciences and medical technology investment and talent over time and has become a hub for innovation. More than 700 pharmaceutical, biotechnology, and medical device companies have a footprint in Switzerland, including some of the largest in the industry, such as Roche and Novartis.
U.S. pharmaceutical trade with Germany
The drug manufacturing boom in Singapore is driven by a business-friendly corporate tax rate, a deep talent pool, strong intellectual property protections, and geographic proximity to major markets in the Asia-Pacific region. Major pharmaceutical companies with manufacturing facilities in Singapore include GSK, Merk, and Novartis.
U.S. pharmaceutical trade with India
The U.S. pharmaceutical trade deficit with India has expanded over time, from $232 million in 2004 to $14 billion in 2025. U.S. drug exports to India have grown from $21 million in 2004 to $734 million in 2025. But imports from India have far outpaced that, ballooning from $253 million to $15 billion over the same period.
India is the world leader in generic drug and vaccine manufacturing, has the highest number of USFDA-approved drug manufacturing plants outside of the U.S., and supplies 40% of generic pharmaceuticals consumed in the U.S.
Growth in pharmaceutical manufacturing in India is driven by low labor costs, economies of scale, and government support for the industry. Investment in India’s pharmaceutical industry has grown since the COVID-19 pandemic as companies seek to diversify their medical supply chains, particularly for active pharmaceutical ingredients, away from China.
U.S. pharmaceutical trade with Singapore
The U.S. had a $10 billion trade deficit in pharmaceuticals with Singapore in 2025 – it exported $603 million worth of drugs and related products and imported $11 billion that year.
Singapore has recently become a major drug manufacturer, which is reflected in its growing pharmaceutical exports to the United States. In 2004, it exported $90 billion to the U.S. By 2014, exports amounted to $1 billion, and by 2024, they skyrocketed to $15 billion, only to fall to $11 billion a year later.
What should individual investors know about pharmaceutical tariffs?
The executive order creates a tiered tariff structure with significant carve-outs, and implications for individual investors depend heavily on which companies and supply chains are exposed.
- Most large-cap pharma names have limited direct exposure. Companies including Merck and Eli Lilly struck deals with the administration and face reduced or zero tariffs. Investors in major branded drugmakers should review whether their holdings have MFN agreements in place.
- Smaller manufacturers and ingredient suppliers carry more risk. The levies land hardest on smaller pharmaceutical companies and active pharmaceutical ingredient makers. Even though finished generics are currently exempt, disruption to API supply chains could pressure input costs and margins for generic drugmakers.
- Reshoring timelines are long; near-term cost pressure is real. Industry associations estimate new drug manufacturing facilities take 5 to 10 years and $2 billion to build. Companies that commit to U.S. manufacturing face a 20% tariff on imports in the interim, lower than the 100% ceiling, but a real cost increase until domestic capacity comes online.
Generic drugs are currently exempt, but the Commerce Department is required to re-evaluate that within one year. That review is the next milestone investors should watch.
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