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Pharma Companies Remain Calm Amid Fresh Tariff Threat by Trump
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Key Takeaways
Trump threatened 200% tariffs on pharma imports if companies do not boost U.S. production in 18 months.
LLY, JNJ, and others have announced tens of billions in U.S. manufacturing and R&D investments.
The pharma sector showed little market reaction, likely due to prior investment moves and negotiation leeway.
And the tariff threat is back. President Trump has once again threatened to impose heavy tariffs on pharmaceutical imports that will possibly be implemented after a year and a half. Nonetheless, the market reaction to the same was pretty calm this time around, unlike the panic that set in last time in April.
Trump has reportedly sent letters to various countries worldwide, levying tariffs on goods imported from these countries, effective August.
The move, as per Trump, is intended to encourage world leaders to manufacture goods in the United States or else face heavy tariffs. The latest announcement will set in another round of negotiation deals.
Along with announcing a 50% tariff on copper imports, The POTUS threatened to levy tariffs as high as 200% on pharmaceutical imports if the pharma/biotech bigwigs do not get their “act together” in a year and a half.
Pharma Giants Ramp Up Domestic Manufacturing
In April 2025, Trump announced so-called “reciprocal tariffs” on almost all trading partners in a move to reportedly boost domestic manufacturing.
The President then also disclosed plans to impose a new series of tariffs on pharmaceutical imports to encourage pharmaceutical companies to move their operations to the United States. He stated that the United States is a very big market, and the new tariffs will propel pharmaceutical companies to rush back to the country.
Per reports, the imports comprise both finished drugs and active pharmaceutical ingredients (APIs) used to make drugs. China and India are among the major suppliers of APIs to the United States.
We note that most pharma/biotech bigwigs had already announced plans to ramp up manufacturing in the country.
Earlier in February 2025, Eli Lilly and Company (LLY - Free Report) announced plans to bolster its domestic drug production across therapeutic areas by building four new pharmaceutical manufacturing sites in the United States. This move will bring LLY’s manufacturing investments in the United States to more than $50 billion since 2020.
Among these, three will focus on manufacturing API, reshoring critical capabilities of small molecule chemical synthesis and further strengthening Lilly's supply chain.
In March 2025, Johnson & Johnson (JNJ - Free Report) announced an investment of more than $55 billion in the United States (over the next four years) in manufacturing, R&D and technology.
Per JNJ, this investment represents a 25% increase in investment compared to the previous four years and builds upon its already increased investments resulting from the passage of the 2017 Tax Cuts & Jobs Act.
Following Trump’s announcement in April, Swiss pharma giant Novartis (NVS - Free Report) announced a planned $23 billion investment over five years in U.S.-based infrastructure. The company intends to manufacture all key drugs for its patients in the country. NVS will build four new manufacturing facilities in three states. Among these, three will be engaged in biologics drug substances, drug products, device assembly and packaging, and one will make chemical drug substances, oral solid dosage forms and packaging.
Another Swiss giant Roche (RHHBY - Free Report) announced an investment of $50 billion in the United States over the next five years. Roche’s investment is expected to create more than 12,000 new jobs, including nearly 6,500 construction jobs, as well as 1,000 jobs at new and expanded facilities. Roche already has a significant existing U.S. presence with more than 25,000 employees, 15 R&D centers and 13 manufacturing sites.
Another pharma giant Merck has allocated more than $12 billion to boost domestic manufacturing and research capabilities, with additional planned investments of more than $9 billion over the next four years.
The pharma/biotech sector was mostly unaffected by the latest announcement. The disdainful response, in turn, can be attributed to the fact that these companies have been given time to relocate manufacturing. Also, the markets now perceive these announcements as an opportunity for negotiation with the United States.
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Pharma Companies Remain Calm Amid Fresh Tariff Threat by Trump
Key Takeaways
And the tariff threat is back. President Trump has once again threatened to impose heavy tariffs on pharmaceutical imports that will possibly be implemented after a year and a half. Nonetheless, the market reaction to the same was pretty calm this time around, unlike the panic that set in last time in April.
Trump has reportedly sent letters to various countries worldwide, levying tariffs on goods imported from these countries, effective August.
The move, as per Trump, is intended to encourage world leaders to manufacture goods in the United States or else face heavy tariffs. The latest announcement will set in another round of negotiation deals.
Along with announcing a 50% tariff on copper imports, The POTUS threatened to levy tariffs as high as 200% on pharmaceutical imports if the pharma/biotech bigwigs do not get their “act together” in a year and a half.
Pharma Giants Ramp Up Domestic Manufacturing
In April 2025, Trump announced so-called “reciprocal tariffs” on almost all trading partners in a move to reportedly boost domestic manufacturing.
The President then also disclosed plans to impose a new series of tariffs on pharmaceutical imports to encourage pharmaceutical companies to move their operations to the United States. He stated that the United States is a very big market, and the new tariffs will propel pharmaceutical companies to rush back to the country.
Per reports, the imports comprise both finished drugs and active pharmaceutical ingredients (APIs) used to make drugs. China and India are among the major suppliers of APIs to the United States.
We note that most pharma/biotech bigwigs had already announced plans to ramp up manufacturing in the country.
Earlier in February 2025, Eli Lilly and Company (LLY - Free Report) announced plans to bolster its domestic drug production across therapeutic areas by building four new pharmaceutical manufacturing sites in the United States. This move will bring LLY’s manufacturing investments in the United States to more than $50 billion since 2020.
Among these, three will focus on manufacturing API, reshoring critical capabilities of small molecule chemical synthesis and further strengthening Lilly's supply chain.
In March 2025, Johnson & Johnson (JNJ - Free Report) announced an investment of more than $55 billion in the United States (over the next four years) in manufacturing, R&D and technology.
Per JNJ, this investment represents a 25% increase in investment compared to the previous four years and builds upon its already increased investments resulting from the passage of the 2017 Tax Cuts & Jobs Act.
Following Trump’s announcement in April, Swiss pharma giant Novartis (NVS - Free Report) announced a planned $23 billion investment over five years in U.S.-based infrastructure. The company intends to manufacture all key drugs for its patients in the country. NVS will build four new manufacturing facilities in three states. Among these, three will be engaged in biologics drug substances, drug products, device assembly and packaging, and one will make chemical drug substances, oral solid dosage forms and packaging.
Another Swiss giant Roche (RHHBY - Free Report) announced an investment of $50 billion in the United States over the next five years. Roche’s investment is expected to create more than 12,000 new jobs, including nearly 6,500 construction jobs, as well as 1,000 jobs at new and expanded facilities. Roche already has a significant existing U.S. presence with more than 25,000 employees, 15 R&D centers and 13 manufacturing sites.
Another pharma giant Merck has allocated more than $12 billion to boost domestic manufacturing and research capabilities, with additional planned investments of more than $9 billion over the next four years.
The pharma/biotech sector was mostly unaffected by the latest announcement. The disdainful response, in turn, can be attributed to the fact that these companies have been given time to relocate manufacturing. Also, the markets now perceive these announcements as an opportunity for negotiation with the United States.