President Donald Trump said on Tuesday that all generic drugs (equivalent/unbranded) imported into the United States will continue to be subject to a zero percent tariff 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 Truth Social: 'This is being done to repatriate the production of generic drugs within America, with a penalty imposed on companies that decide not to build factories and equipment within the specified time period granted to them,' according to Reuters.

Trump is pressuring pharmaceutical 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 generic. Trump added that the policy regarding patented, branded, or innovative drugs will remain unchanged.

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

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