President Donald Trump’s executive order, announced on Wednesday, April 1, 2026, in Washington, D.C., aims to bolster domestic production and reshape trade dynamics by offering reduced tariffs to companies that relocate manufacturing to the U.S. and enter into pricing agreements.

Incentivizing Domestic Production

The order introduces a tiered system designed to encourage companies to bring their manufacturing operations back to the United States. This initiative is a concerted effort to reduce reliance on foreign suppliers and potentially lower healthcare costs.

Tariff Reductions and Agreements

Companies committing to relocate manufacturing facilities to the U.S. will see tariffs on their products reduced to 20%. Furthermore, companies can avoid tariffs altogether by entering into a most-favored-nation agreement with the Department of Health and Human Services. Those building U.S.-based plants are also exempt from tariffs during the construction phase.

Speaking from the Cross Hall of the White House, President Trump emphasized the importance of bringing jobs and economic activity back to American soil, stating this order is a crucial step towards achieving that goal.

Existing Trade Agreements and Exemptions

The executive order includes provisions for countries with existing trade agreements with the United States. Drugs manufactured in Switzerland, Japan, South Korea, and the 27-member European Union will be subject to a 15% tariff, aligning with current trade agreements.

Phase-In Period for Businesses

A 120-day phase-in period is included for large companies to adjust to the new tariff policies. This provides a transition period for affected businesses to adapt to the changes.

This strategy reflects the administration’s broader focus on prioritizing American economic interests and utilizing trade policy to advance national interests in a changing global landscape.