There was one surprise big announcement from former President Donald Trump that you may have missed on Truth Social. Most significantly, he leaked intent to cut prescription drug and pharma prices by a stunning 30%-80%. He clearly knew this was coming and added the announcement to his campaign strategy. This provocation comes just a few months ahead of the November 2024 presidential election. Trump highlighted that these price decreases would go into effect “almost immediately.” This daring step looks to address the skyrocketing cost of healthcare for Americans.
Trump’s announcement not only focuses on drug prices but includes plans to impose tariffs on imports from key trading partners—Mexico, China, and Canada. Together these three countries made up 42% of all U.S. imports in 2024. Mexico moved up to first place among exporters, with $466.6 billion leading into the election. The former president has a great opportunity to use these tariffs to strengthen the U.S. economy and uphold American producers.
Tariffs and Economic Strategy
The impacts of tariffs have long divided economists. Under this approach, advocates argue that tariffs can protect vulnerable domestic industries. They claim that by making imported products more expensive, tariffs are forcing consumers to buy American-made products. Opponents argue that tariff increases only result in increased prices for American consumers and risk triggering retaliatory tariffs from affected trading partners.
Trump’s focus on Mexico, China, and Canada aligns with his administration’s previous stance on trade issues. By picking these countries he seeks to both correct trade imbalances and help resurrect domestic manufacturing. The proposed tariffs are expected to have a direct impact on sectors reliant on imports, potentially reshaping supply chains and market dynamics.
“I will be instituting a MOST FAVORED NATION’S POLICY whereby the United States will pay the same price as the Nation that pays the lowest price anywhere in the World.” – Donald Trump
This policy is another demonstration of Trump’s commitment to standing up for American consumers. He needs to ensure that they’re not paying any more for their medications than other nations are. The executive order would cap American drug prices to the lowest available around the world. This action will promote competition and save American consumers billions.
Immediate Impact on Drug Prices
The executive order is Trump’s primary re-election strategy. It directly appeals to voters who are most concerned about their healthcare being affordable. By promising substantial cuts to prescription drug prices, Trump seeks to appeal to a wide demographic, particularly those struggling with high healthcare costs.
Drug prices, including for drugs already on the market, will be lowered without delay. This administration is taking steps to address a long-standing problem that has hurt millions of Americans. Trump’s claim that all of these changes would be made “almost instantly” gives the impression of an urgent and immediate responsiveness to the American public’s demand.
The announcement comes right as the U.S. Dollar Index (DXY) is up 0.22%. The USD has already reached 100.55 at the time of this report. This increase could just indicate a market reaction that is, on balance, very positive to the direction of Trump’s economic policies. The long-term ramifications of his suggested tariffs and price decreases are unknown.
Looking Ahead to 2024
The nearer we get to this presidential election, the more likely we are to see Trump’s risky healthcare and trade strategy become the story of 2020. He talks big about lowering drug prices but slaps tariffs on. In the process, he makes himself the greatest advocate of American consumers and manufacturers.
The interaction of his healthcare agenda and tariff enactment will be closely watched by voters and critics. Economists will especially be watching — with bated breath no doubt — what Trump’s harebrained economic protectionism does to domestic markets and international relationships.