President Donald Trump’s plan to impose tariffs on pharmaceutical imports has thrust North Carolina’s No. 1 trade commodity into uncertainty, as manufacturers prepare to face the impact.
In late September, Trump announced a 100% tariff on imports of pharmaceuticals, set to begin on Oct. 1, yet this remains in limbo. Additionally, this announcement only applies to name-brand pharmaceuticals, not generic medications.
Large manufacturers have been preparing for the impact of tariffs since Trump took office. Manufacturers such as Eli Lilly and GSK have been planning to mitigate the impact of tariffs by investing in US manufacturing plants, according to The Wall Street Journal (WSJ). Smaller manufacturers, however, that produce only one or two drugs, will feel the greater impact of the tariffs because they rely more heavily on contract manufacturers overseas, according to the WSJ. Eli Lilly has a manufacturing facility in the Research Triangle Park, and GSK has an R&D site in Zebulon.
The industry has been the state’s No. 1 export since 2020, according to data from the Economic Development Partnership of North Carolina (EDPNC). Notably, 2024 marked the first year that pharmaceuticals became the state’s top import; these trends have continued year-to-date through July.
Pharmaceutical exports climbed to $7.4 billion year-to-date through July, up from $6.8 billion — a gain of about 9%, according to EDPNC data. The sector made up nearly 29% of total exports over the same period.
“Year-to-date through July, North Carolina’s pharmaceutical product imports have nearly exceeded the state’s total for all of 2024 — with much of the surge concentrated in January, February, and March, as firms accelerated shipments in anticipation of the federal tariff on pharmaceutical drugs,” Joseph Harris, fiscal policy analyst for the John Locke Foundation, told the Carolina Journal. “Since then, import volumes have largely leveled off, but companies remain in uncertainty as they await a final decision on whether and when tariffs will be levied on pharmaceuticals.”
Through July, pharmaceutical imports rose from $9.3 billion to $17.6 billion, representing a nearly 90% increase, according to EDPNC data. For all of 2024, pharmaceutical imports totaled $19 billion, compared with $12.2 billion in 2023 and $5.2 billion in 2022. Year-to-date through July, pharmaceuticals accounted for approximately 29% of total imports.
“The proposed 100% tariff on branded and patented pharmaceutical imports could pose serious economic consequences,” said Harris. “This issue is especially relevant to North Carolina, where pharmaceuticals are the state’s largest traded sector — both its most significant import and its leading export. The Research Triangle’s concentration of drug manufacturers, suppliers, and research firms means any disruption to pharmaceutical trade could have a pronounced impact on the state.”
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