The return of Trump-era “America First” trade policies in 2025 has reshaped the regulatory and economic environment for companies regulated by the U.S. Food and Drug Administration (FDA)—particularly those in the food, cosmetics, medical device, and over-the-counter (OTC) drug sectors. With the reimposition of tariffs on key imports, intensified scrutiny of foreign manufacturing, and a sweeping deregulatory agenda aimed at rolling back agency authority, companies face a uniquely challenging landscape.
These shifts come at a time when the FDA itself is undergoing internal restructuring and budgetary pressure, leading to operational delays and uncertainty around enforcement priorities. In this evolving climate, FDA-regulated businesses must not only stay compliant with existing rules but also proactively adapt to shifting trade barriers and regulatory signals. We’ll explore here how recent policy changes are impacting industry operations and outline actionable legal and strategic steps companies can and should take to remain compliant, competitive, and resilient.
Key Developments in 2025 Trade Policies
Section 232 Investigations into Pharmaceuticals and Semiconductors
On April 1, 2025, the administration initiated Section 232 investigations into pharmaceutical and semiconductor imports, citing national security concerns due to reliance on foreign production. These investigations could lead to tariffs ranging from 10% to 25%, with decisions anticipated by mid-May. Industry analysts warn of potential shortages and increased costs, particularly affecting pharmaceutical imports valued at $211 billion annually.
Regulatory Freeze and Deregulatory Initiatives
President Trump issued a Regulatory Freeze Executive Order on January 20, 2025, halting all new rulemaking and regulations across federal agencies, including the FDA, until reviewed by agency heads appointed by the administration. Concurrently, a Deregulatory Initiative aims to rescind existing regulations deemed unconstitutional or beyond federal authority, potentially affecting FDA enforcement actions and compliance requirements.
Implications for FDA-Regulated Companies
Supply Chain Disruptions and Tariff Impacts
The reintroduction of tariffs—particularly those targeting pharmaceutical ingredients, medical devices, and raw materials from China, India, and other key exporters—has created significant supply chain challenges for FDA-regulated companies. These tariffs, which range from 10% to 25%, have driven up import costs for everything from OTC drug components to food additives and cosmetic packaging. For companies relying on just-in-time inventory models or single-source suppliers, these cost increases can be both sudden and unsustainable. Moreover, the added compliance burden at the border—such as harmonizing FDA documentation with U.S. Customs and Border Protection (CBP) requirements—can lead to delays, detentions, or rejections of shipments. Companies must now reevaluate sourcing strategies, prioritize supply chain diversification, and ensure that alternate suppliers meet FDA quality and safety standards to avoid disruptions in product availability and maintain regulatory compliance.
Increased Enforcement Scrutiny for Foreign Manufacturers
The FDA’s increased focus on foreign manufacturing facilities, especially those in India and China, has led to a higher frequency of compliance violations. Facilities classified as “Official Action Indicated” (OAI) or “Voluntary Action Indicated” (VAI) were nearly three times more frequent than domestic facilities, indicating heightened scrutiny and potential enforcement actions.
Regulatory Uncertainty and Compliance Challenges
The regulatory freeze and deregulatory initiatives introduce uncertainty regarding the enforcement of existing FDA regulations. Companies may face challenges in navigating shifting compliance requirements, particularly concerning labeling, traceability, and manufacturing standards.
Strategic Recommendations for Companies
In light of the evolving trade restrictions, FDA regulatory shifts, and ongoing agency restructuring, companies must adopt a proactive and integrated approach to compliance, operations, and risk management. Below are strategic recommendations tailored to FDA-regulated sectors—particularly food, cosmetics, medical devices, and OTC drugs:
Conduct a Comprehensive Regulatory and Trade Risk Assessment
Companies should initiate cross-functional assessments to identify how newly imposed tariffs, regulatory freezes, and deregulatory efforts affect their business. This includes:
- Mapping product portfolios to determine exposure to tariffs and restricted countries.
- Reviewing current FDA submissions and registrations to ensure alignment with evolving enforcement trends.
- Evaluating regulatory dependencies on foreign suppliers, especially those in countries under tariff scrutiny (e.g., China, India).
A thorough risk matrix should include potential cost increases, delays in ingredient or component sourcing, regulatory inspection trends, and geopolitical instability.
Diversify and Requalify Supply Chains
Given the volatility of trade policy, companies must reduce reliance on single countries or vendors, especially those affected by tariffs or increased FDA scrutiny. Strategic steps include:
- Identifying and qualifying alternative suppliers in trade-friendly jurisdictions (e.g., Mexico under USMCA).
- Performing FDA-compliant due diligence on new suppliers, including facility audits, GMP verification, and data integrity checks.
- Reassessing supply contracts to include force majeure and tariff-related clauses that allow flexibility and cost-sharing.
For medical device and drug companies, changes in API or component sources may trigger FDA filing amendments—these should be anticipated and pre-planned to avoid supply gaps.
Enhance Internal Compliance and Documentation Protocols
With the FDA facing internal staffing challenges and shifting enforcement priorities, companies should not expect leniency in core compliance areas. Rather, a robust documentation framework is more critical than ever:
- Implement real-time compliance dashboards for monitoring FDA submissions, facility inspections, and adverse event reports.
- Centralize documentation related to sourcing, supplier qualifications, facility changes, and regulatory correspondence to streamline audits or enforcement inquiries.
- Train internal teams on how new trade rules intersect with FDA laws (e.g., how tariffs might require a reassessment of “country of origin” labeling or FDA import declarations).
Stay Engaged in Regulatory and Trade Policy Advocacy
Regulatory uncertainty can often be mitigated through early engagement. Companies should not remain passive observers:
- Participate in FDA public comment opportunities—especially regarding proposed changes to labeling, cosmetics safety, MoCRA implementation, or traceability requirements.
- Engage with the USTR and trade groups to seek tariff exclusions or lobby for sector-specific exemptions under new trade rules.
- Join industry coalitions and task forces through associations such as BIO, CHPA, AdvaMed, and the Personal Care Products Council, to align on collective advocacy strategies.
Scenario Planning and Business Continuity
Developing “what-if” scenarios is essential in an unpredictable regulatory climate:
- Model potential outcomes such as 25% tariffs on APIs, loss of a critical foreign supplier, or delays due to FDA workforce shortages.
- Establish business continuity plans that include emergency supplier transitions, alternate transportation routes, and pre-cleared regulatory fallback options (e.g., Emergency Use Authorizations or priority review pathways).
- Incorporate AI and predictive analytics into supply chain monitoring to anticipate and mitigate bottlenecks proactively.
By adopting these strategies, companies in the food, cosmetics, medical device, and drug sectors can maintain regulatory compliance, protect market share, and adapt swiftly to a trade and regulatory environment that is both volatile and highly politicized. Resilience in 2025 and beyond depends not just on meeting FDA expectations—but on anticipating how those expectations may evolve in tandem with geopolitical and trade realities.
For additional comments or questions on the re-emergence and impact of Trump trade tariffs on your business, or for other ongoing questions on FDA regulatory compliance or enforcement, please contact us at info@garg-law.com.
