The Onshoring Dilemma: Pharmaceuticals, Tariffs, and America’s Drug Supply Chain

The United States faces a critical challenge in its pharmaceutical industry: how to reduce dependency on foreign suppliers, particularly China, while maintaining affordable access to essential medications. With approximately 90% of generic antibiotics consumed in the U.S. coming from China [3], this reliance has become a focal point for policymakers seeking to bolster domestic manufacturing and improve supply chain resilience. However, the path to onshoring pharmaceutical production is fraught with complexities that make it far from straightforward [1] [2].

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The Role of Tariffs in Reshaping Supply Chains

Tariffs have been a key tool in the U.S.’s trade strategy under recent administrations, designed to incentivize domestic manufacturing and reduce reliance on foreign imports. In theory, imposing tariffs on pharmaceutical products and raw materials sourced from China could encourage companies to bring production back to American soil. But for the pharmaceutical industry, this approach is riddled with challenges due to its “incredibly intertwined” global supply chains [5].

Active Pharmaceutical Ingredients (APIs), the building blocks of most drugs, are often produced in countries like China and India because of their cost advantages, access to natural resources, and less stringent environmental…