India, China, and the European Union, which produce the vast majority of active pharmaceutical ingredients (APIs) used in drugs and also manufactured finished products, will face reciprocal tariffs from the United States, effective midnight April 3.

Speaking at an event in the White House Rose Garden Wednesday, President Donald Trump said that pharmaceutical tariffs were needed to ensure adequate supply in case of wars or other potential supply issues.

The country tariffs are as follows: India (26%); China (34%); and European Union (20%).

Trump noted that the reciprocal tariffs on the trio are much less than the tariffs they impose on American goods: India (52%); China (67%); and European Union (39%).

According to the U.S. Pharmacopeia, as of 2021, India manufactured nearly half -- 48% -- of the APIs made into drugs consumed in the U.S. Europe made 22%, and China, 13%. Just 10% of APIs in 2021 were manufactured in the U.S.

A 2022 evaluation of the top 100 Medicare Part D drugs based on spend from PharmacyChecker Research found that 32 were finished in the U.S. and another 67 were finished in countries including European Union countries, Canada, Japan, Singapore, Switzerland, and the United Kingdom.

Most APIs are used in the manufacture of generic drugs, which account for 9 out of 10 prescriptions filled in the U.S.

That means generic drugmakers, such as Viatris (NASDAQ:VTRS) and Teva Pharmaceutical Industries (NYSE:TEVA), could see significant impact.

In his comments, Trump noted that several large drugmakers, Johnson & Johnson (JNJ), Eli Lilly (LLY), and Merck (MRK) have recently made announcements of making manufacturing investments in the U.S.