Trump Can Pocket Easy Win by Safeguarding America’s Pharmaceutical Supply Chain

This week witnessed the 100th day of the new Trump administration, with myriad early successes on everything from border security to military recruitment.  That helps explain the unprecedented upturn in Americans telling pollsters that the nation is on the “right track” since January’s presidential transition.  

As we now transition to the Trump administration’s second 100 days, it possesses an ideal opportunity to pocket a win by protecting America’s pharmaceutical supply chain in a way that benefits American consumers.  

The golden opportunity in question is a Department of Commerce (DOC) investigation of the pharmaceutical sector under Section 232 of the Trade Expansion Act of 1962.  

In its essence, Section 232 allows presidential administrations to investigate and correct import dynamics that potentially threaten U.S. national security.  Accordingly, it constitutes a powerful trade and national security tool, and the investigation provides a timely opportunity to make our healthcare system more secure, more resilient, and ultimately more cost-efficient for consumers if conducted in a wise and strategically sound manner.  

After all, as we learned the hard way throughout the COVID pandemic, global supply chain disruptions can strain access to critical goods and services, including lifesaving medicines.  Few people need be reminded, therefore, about the importance of remaining vigilant in protecting our ability to secure access to items like pharmaceuticals necessary for our well-being.  

Moreover, it’s undeniable that portions of America’s pharmaceutical supply chain in particular remain vulnerable, especially in areas of overreliance on unfriendly sources of certain active pharmaceutical ingredients (APIs) and finished drugs.  

China, in particular, exploits its manufacturing power and command-and-control economic regime to dominate vital upstream sources.  Its overtly anti-American economic model, outright theft of intellectual property (IP), and deliberate domination of pharmaceutical ingredients constitute a genuine threat, and the Trump administration will not and should not allow it to weaponize supply chains to maintain a chokehold over Americans’ pharmaceutical lifeline.  

Section 232 offers a potentially pivotal tool in that endeavor.  

In addressing those legitimate challenges, however, solutions employing Section 232 mustn’t reflexively punish critical allies and trade partners in ways that would undermine rather than strengthen pharmaceutical supply chains.  The current DOC review should instead encourage domestic capacity expansion where possible, and reinforce and expand cooperation with friendly nations – nations that not only share our values in protecting IP and product safety standards, but whose own pharmaceutical sectors play an indispensable role in delivering safe and effective medicine to Americans.  

That is not a contradictory approach.  We can use Section 232 to strengthen domestic resilience while avoiding undermining America’s important global partnerships, while simultaneously reducing our dependency upon hostile actors like China.  Indeed, those goals are mutually reinforcing.  

Here’s why.  America accounts for an astonishing two-thirds of all new drugs introduced to the world, and most of the lifesaving medicines on which American consumers rely are manufactured domestically.  Those domestic manufacturers, however, source many of their ingredients from allied locales like Switzerland, Ireland, the United Kingdom, and elsewhere within the European Union.  For example, one-third of the ingredients of pharmaceuticals used by American consumers are sourced from the E.U.  Because those supply chains are deeply entrenched and would require years to remake, domestic manufacturers can’t simply start sourcing those ingredients and medicines from domestic suppliers, regardless of price.  

Consequently, unless Section 232 actions are employed adeptly, they could conceivably end up increasing costs for American consumers, undermining the sustainability of federal healthcare programs like Medicare, and reducing our access to important medicines.  

Therefore, the Trump administration should pursue a targeted, partnership-driven approach rather than one that might erroneously treat all overseas supply partnerships as Section 232 threats.  

That means focusing Section 232 enforcement actions on adversarial nations like China through tailored trade remedies and industrial adjustments.  It also means solidifying trade and regulatory engagement with reliable allies like Ireland or Switzerland to create a resilient supply chain on which we can depend in future moments of crisis.  We must also use the Section 232 investigation to promote greater transparency and accountability in pharmaceutical supply sourcing, and incentivize domestic production of key pharmaceutical ingredients and finished drugs via tax credits, regulatory streamlining, and public-private partnerships.  

Used wisely, the Trump administration can use Section 232 to set the foundation for a pharmaceutical supply chain that is stronger, more secure, and less prone to single points of failure or disruption by adversaries like China.  Our national security and the well-being of American consumers depend upon it.  

Timothy H. Lee is Senior Vice President of legal and public affairs at the Center for Individual Freedom.

Reprinted with Permission from CFIF.org – By Timothy H. Lee

The opinions expressed by columnists are their own and do not necessarily represent the views of AMAC or AMAC Action.