When President Donald Trump launched his bold trade policy agenda back in 2018, targeting China with sweeping tariffs, pharmaceuticals were conspicuously spared, unlike semiconductors, lumber, and copper, that were caught in the economic crossfire. But the real vulnerability in America’s pharmaceutical supply chain wasn’t found in finished pills or injectables — it lay hidden in the critical components of them: "active pharmaceutical ingredients," or APIs.
As the name suggests, these APIs are the critical active ingredients in many of the pills and injectable drugs sold in the U.S. — from antibiotics and blood pressure medications to cancer treatments. And a staggering share of them come from one place: China.
This reality has far-reaching implications for the U.S. economy, national security, and public health – implications that are now more ominous in view of the chaos surrounding President Trump’s tariff threats. While finished pharmaceutical products may be protected by longstanding World Trade Organization trade agreements that eliminate tariffs, the critical starting materials used to make them — bulk chemicals and APIs— were not explicitly exempted under Trump’s trade measures. That omission left the generic drug market, which accounts for about 90% of all prescriptions filled in the United States, highly exposed.
The exposure continues. “There’s still a risk here,” warned Tom Kraus, vice president of government relations at the American Society of Health-System Pharmacists. “If China were to impose an export restriction on any key ingredients, it would be hard to make up that gap.”
That risk is not hypothetical. China responded to Trump’s recently announced tariffs with equal force, threatening to levy its own huge retaliatory tariffs on U.S. goods. In the shadow of this escalating trade war, the specter of a supply chain disruption has become alarmingly real.
Even without overt trade retaliation, the sheer scale of U.S. dependence on China for pharmaceutical inputs is cause for concern. A report from the U.S.-China Economic and Security Review Commission described the risks. Some of its most significant conclusions:
• China is the world’s largest producer of APIs, and the U.S. is heavily dependent on drugs that either come from China in finished form or from APIs sourced there.
• Because drug companies are not required to list the country of origin for APIs on drug labels, “U.S. consumers may be unknowingly accepting risks associated with drugs originating from China.”
• The Chinese government promotes and protects the nation’s pharmaceutical companies to the disadvantage of foreign competitors, as it does in other sectors, such as chemicals, electronics, and telecommunications.
• “Should Beijing opt to use U.S. dependence on China as an economic weapon and cut supplies of critical drugs, it would have a serious effect on the health of U.S. consumers.” This has significant implications for the current tariff wars.
• China’s dominance, paired with weak regulatory oversight within China’s manufacturing sector, poses an unacceptable risk to the safety of American consumers.
In recent years, China’s pharmaceutical industry has been linked to a number of quality control scandals, including the distribution of contaminated or substandard drug ingredients. Given the opaque nature of international drug production and labeling laws that only require the final place of assembly to be disclosed, most American consumers have no idea that their daily medications may incorporate ingredients sourced from poorly regulated Chinese factories.
But safety is only one piece of the puzzle. As noted above by both the U.S.-China Economic and Security Review Commission report and American Society of Health-System Pharmacists VP Tom Kraus, the other is strategic vulnerability. If China were to deliberately restrict API exports during a period of heightened geopolitical tension — whether over Taiwan, trade disputes, or other flashpoints — the health consequences could be catastrophic.
Common conditions like hypertension, diabetes, infections, and heart disease rely on continuous access to a broad range of generic drugs. An API shortage in the U.S. could quickly ripple through the system, leaving hospitals scrambling and forcing providers to switch to less effective or more expensive second- and third-line treatments. In extreme cases, lives could be lost not due to a lack of medical knowledge, but because of a lack of drugs.
This is not a theoretical dystopia. As of mid-March, the U.S. FDA reported shortages of 89 drugs — including life-saving chemotherapy agents and other essential medicines. These shortages were not driven by surging demand, but by bottlenecks and disruptions in the global supply chain — exactly the kind of vulnerabilities made worse by overreliance on a single foreign supplier.
What’s to be done?
First, Congress must take stock of the situation. It is critical to quantify the extent of U.S. dependence on Chinese APIs and to map out alternative sources, both domestic and international. A full audit of the pharmaceutical supply chain would provide the foundation for more informed policymaking.
Second, Congress should empower the FDA to expand its oversight capacity in China. While the FDA does maintain a limited presence in the country, the number of inspectors is woefully inadequate given the scale of production. A significant increase in on-the-ground inspection personnel, paired with new authority to ensure compliance with U.S. safety standards, is essential.
Third, transparency is essential. Drug manufacturers should be required to disclose not only where a medication was assembled, but where its ingredients were sourced. Patients deserve to know what they are putting into their bodies and where it came from.
Fourth, Congress can harness its budgetary power to stimulate domestic production. By requiring government health systems — Medicare, Medicaid, and the Department of Veterans Affairs — to prioritize drug purchases from certified domestic manufacturers or FDA-inspected international facilities, the U.S. can begin to rebuild a more resilient pharmaceutical base.
Finally, and most important in the short term, the Trump administration needs to consider carefully the implications of tariffs they intend to apply to imported active pharmaceutical ingredients and finished drug products.
There is no question that globalization has brought tremendous benefits to pharmaceuticals, among them lower costs, more competition, and broader access. But that global network becomes a dangerous liability when it rests on a single, fragile pillar. China’s dominance of the API market has given it powerful economic leverage and introduced unacceptable risk into the American healthcare system. To ignore that vulnerability is to gamble with the health of millions.
Henry I. Miller, MS, MD
Henry I. Miller, MS, MD, is the Glenn Swogger Distinguished Fellow at the American Council on Science and Health. His research focuses on public policy toward science, technology, and medicine, encompassing a number of areas, including pharmaceutical development, genetic engineering, models for regulatory reform, precision medicine, and the emergence of new viral diseases. Dr. Miller served for fifteen years at the US Food and Drug Administration (FDA) in a number of posts, including as the founding director of the Office of Biotechnology.
