President Donald Trump said on Tuesday that all generic drugs (equivalent/not branded) entering the United States will continue to be subject to zero percent customs duty for two years, starting from August 1, after which the tariff rate will be raised to 100 percent for one year, and then to 200 percent thereafter.

Trump said in a post on the Truth Social platform: 'This is being done to relocate the production of generic drugs inside America, with a penalty imposed on companies that decide not to build factories and equipment within the given time frame,' according to Reuters.

Trump is putting pressure on drug companies through a drug pricing policy based on 'most favored nation' to lower prices to the levels paid by consumers in other high-income countries.

According to the U.S. Food and Drug Administration, more than 90 percent of drugs sold in the United States are generics. Trump added that the policy regarding patented, branded, or innovative drugs will remain unchanged.

Major pharmaceutical companies worldwide had signed agreements with the U.S. government last year, exempting billions of dollars worth of drugs from customs duties.

Trump had signed an executive order in April imposing 100 percent customs duties on branded drugs imported into the United States, unless manufacturers agreed to government drug pricing agreements or committed to manufacturing their products locally.