Taipei: A proposed U.S. tariff regime targeting patented drugs is anticipated not to affect the prices or supply of medicines in Taiwan, officials disclosed, attributing this to the country's focus on tariff-exempt generic drug exports. According to Focus Taiwan, the announcement came after U.S. President Donald Trump signed an executive order mandating tariffs of up to 100 percent on branded or patented drugs manufactured overseas. This order establishes a 20 percent tariff until April 2, 2030, for companies with approved plans to set up production facilities within the United States. Waivers are applicable to firms with agreements on pricing and domestic manufacturing. Additionally, the tariff-free status of generic drugs will undergo review within a year. Major economies, such as the European Union, Japan, South Korea, and Switzerland, have secured a lower 15 percent tariff rate through existing agreements. However, Taiwan's exclusion from the initial exemption list has led to domestic concerns. Deputy Health Minister Lin Ching-yi addressed public apprehension via social media, urging the public to discern between exports and imports. She stated that the executive order is a strategy by the Trump administration to encourage manufacturing to return to U.S. soil, impacting prices of patented drugs sold in the U.S., but not those in Taiwan. Lin noted that Taiwan does not impose tariffs on pharmaceuticals imported from the U.S., ensuring stable prices and supply of American medications in Taiwan. Chiang Chih-kang, director-general of Taiwan's Food and Drug Administration (TFDA), informed CNA that Taiwan's pharmaceutical trade with the U.S. predominantly involves generic drugs and their active pharmaceutical ingredients (APIs), which are not subject to the highest tariffs. Based on 2024 data, generics represented NT$8.47 billion (US$264.75 million), or 86.5 percent, of Taiwan's finished pharmaceutical exports to the U.S., while API exports amounted to NT$544 million, or 9.9 percent of total exports. Despite th e U.S. granting only a one-year exemption for generics, Chiang mentioned that tariff exemptions for these products and their raw materials are part of prior negotiations under a bilateral investment memorandum and the proposed Agreement on Reciprocal Trade (ART). "The exemption for generic drugs and their ingredients is clearly written into the ART text," he stated, affirming Taiwan's continued engagement with Washington as it seeks to rebuild the legal framework for reciprocal tariffs following the U.S. Supreme Court's ruling on Trump's "reciprocal" tariffs as unconstitutional. Taiwan's exposure to patented drugs is minimal, with just one such product exported to the U.S., valued at about NT$1.32 billion annually. The manufacturer has already arranged production in Puerto Rico to mitigate risks. The TFDA remains committed to streamlining reviews for U.S. drug imports to maintain a stable supply and ensure public access.
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