Project 2025 Coauthor: Trump Tariffs Could Endanger Health Care
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President Donald Trump is right to play hardball on trade with Europe. The European Union targets leading American companies with rules, fines, and other punitive actions that undermine their ability to do business in EU countries and deliver technologies to their citizens and small businesses.
However, there are some lines that we should not cross in response to trade tensions—like the tariffs President Trump is expected to impose on imported medicines any day now.
The president can levy so-called Section 232 tariffs on imports deemed a threat to national security. While that rationale may apply to medicines from China, imports from Europe and Japan pose no such threat.
Tariffs on European and Japanese medicines would harm Americans who rely on prescription drugs. They would disrupt the small firms that underpin our health care system—disproportionately hurting early-stage biotech startups, specialized manufacturers, and independent pharmacies, especially in rural communities.
These companies operate lean and are laser-focused. Most emerging biotechs, in fact, revolve around a single drug candidate. They have small teams, tight budgets, and years of regulatory hurdles ahead. Many rely on active pharmaceutical ingredients sourced from Europe to develop their therapies.
Tariffs on those imports wouldn't just slow medical progress—they could stop it in its tracks.
That's because small firms aren't on the sidelines of drug development. They are the front line. In 2024, nearly two-thirds of all U.S. clinical trials were launched by emerging biopharma companies. Last year, small businesses developed 85 percent of newly approved drugs and brought more than half to market on their own.
Breakthroughs require reliable, affordable inputs. A full one-third of the active pharmaceutical ingredients in Americans' medicines come from Europe. Building new U.S. pharmaceutical plants can take up to a decade and cost $2 billion. Waiting that long isn't an option for a startup betting everything on one product.
Even established manufacturers aren't immune. Many of America's nearly 1,600 domestic facilities—which produce approximately one-half of U.S. medicines—still depend on European ingredients. Tariffs would spike their costs and strain an already fragile supply chain. Some may be forced to pull workers off the factory floor.
WASHINGTON, DC - APRIL 02: U.S. President Donald Trump holds up a chart while speaking during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2,...
WASHINGTON, DC - APRIL 02: U.S. President Donald Trump holds up a chart while speaking during a 'Make America Wealthy Again' trade announcement event in the Rose Garden at the White House on April 2, 2025 in Washington, DC. MoreThen there are the pharmacies. Unlike big chains, independent pharmacies often can't negotiate bulk deals or absorb sudden price hikes. A steep tariff could erase already thin margins, forcing many to shut their doors, including in underserved and rural communities that already lack sufficient access to pharmacies.
In 2023 alone, the U.S. imported close to $130 billion in pharmaceutical products from Europe. A tariff, of 25 percent for instance, could translate to tens of billions in new costs for our health care system. Those dollars won't just hit corporate balance sheets. They'll show up in Medicare and Medicaid budgets, insurance premiums, and out-of-pocket costs for seniors and working families.
Placing tariffs on medicines is not like taxing handbags or hubcaps. There's often no clear "substitute" for the medicine that works best for a particular patient. If a treatment is made in Ireland or Switzerland, a tariff doesn't create a U.S. version. It creates delay, financial strain, or worse—outright loss of access.
Developed countries have long treated medicines as off-limits in trade disputes for one simple reason: patients' lives should never be used as leverage in a trade war.
If President Trump's goal is to keep America from relying on adversaries like China for key medicines, life-saving European drugs shouldn't be caught in the crossfire.
Entrepreneurs and small business owners are not asking for special favors. They merely want predictability, light government intervention, access to markets, and a fair shot. Drug tariffs will inject turmoil into a sector that needs stability. For biotech startups and other small businesses, these tariffs aren't just a cost increase—they are an existential threat.
President Trump is right to confront trade inequities, intellectual property theft, and other countries' lack of compliance with previous trade deals. But when it comes to medicines, tariffs will cause broad-based harm. Practically speaking, tariffs will not build domestic capacity any time soon and they will not protect American innovation.
Medicines must remain exempt from tariff actions against allies like Europe and Japan. American patients and the small businesses powering our health care system need this stability and assurance.
Karen Kerrigan is president and CEO of the Small Business and Entrepreneurship Council (sbecouncil.org) in Washington, D.C. She was the author of Project 2025's chapter on the Small Business Administration.
The views expressed in this article are the writer's own.
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