Trump's 200% Tariff Threat: A Shockwave for Pharma Supply Chains

US President Donald Trump has threatened a 200% tariff on the pharmaceutical industry, which could send shockwaves through global supply chains. The industry is warning Trump that tariffs may be counterproductive for the US healthcare system, as moving manufacturing domestically takes years, not months. The Chartered Institute of Export & International Trade's director general Marco Forgione said that tariffs could raise costs and delay access to lifesaving treatments on both sides of the Atlantic.

US President Donald Trump has threatened to impose up to 200% tariffs on pharmaceuticals imported into the United States, a move that could significantly impact global supply chains. This announcement comes amidst ongoing discussions on tariffs for semiconductors and other products. The threat has sparked concern within the pharmaceutical industry, which is warning that such tariffs could be counterproductive and potentially detrimental to the US healthcare system.

Trump made the threat during a cabinet meeting on July 8, 2025, stating that the tariffs would be implemented "very soon" but would not go into effect immediately. He suggested a grace period of about a year to a year and a half for pharmaceutical companies to "get their act together" and bring manufacturing back to the US [1].

Pharmaceutical stocks were largely unchanged following Trump's comments, with some slight dips in major companies with global manufacturing capabilities. However, the industry has expressed concerns that the proposed tariffs could drive up costs, deter investments in the US, and disrupt the drug supply chain, ultimately putting patients at risk [2].

Marco Forgione, director general of the Chartered Institute of Export & International Trade, warned that such tariffs could raise costs and delay access to lifesaving treatments on both sides of the Atlantic. He emphasized that pharmaceutical supply chains are complex and that any tariffs could have real global consequences [2].

Several pharmaceutical companies have already announced plans to invest in manufacturing facilities in the US in response to the potential tariffs. Eli Lilly, for instance, plans to invest an additional $27 billion into US-based sites, while Novartis, Sanofi, and others have made similar moves to onshore manufacturing [2].

Despite the immediate uncertainty, the industry is advising patience. David Risinger, an analyst at Leerink Partners, believes that the announcement is positive for the industry as the tariffs will not be implemented immediately, and it is unclear if the administration will follow through in the future [1].

The proposed tariffs are part of a broader strategy by the Trump administration to encourage domestic manufacturing and reduce reliance on foreign suppliers. However, the industry argues that tariffs on medicines would be counterproductive and could increase the costs of medicines, which have historically been exempt from tariffs [1].

As the details of the tariffs are expected to be finalized by the end of July, the pharmaceutical industry and investors will be closely monitoring the situation. The potential impact on drug prices, supply chains, and research and development efforts could have far-reaching implications for the healthcare sector and the broader economy.

References:
[1] https://www.cnbc.com/2025/07/08/trump-threatens-pharmaceutical-tariffs-200.html
[2] https://www.clinicaltrialsarena.com/news/trumps-200-tariff-threat-could-send-shockwaves-through-pharma-supply-chains/