President Donald Trump’s latest push to transform America’s manufacturing landscape has sent shockwaves through two of the country’s most crucial industries: pharmaceuticals and semiconductors. Announced in late September 2025, the administration’s sweeping new tariff plans target both sectors with a clear message: build in America, or pay the price.
On the evening of September 26, President Trump took to Truth Social to unveil a dramatic policy shift for the pharmaceutical industry. In a brief but impactful statement, he declared that all brand-name drugs imported into the United States would face a 100% tariff starting October 1, 2025—unless the company manufacturing them was actively building a pharmaceutical plant on American soil. The move, as reported by The Wall Street Journal, left industry insiders scrambling to interpret the fine print. Would every product need to be made in the U.S., or would a single new construction project suffice for exemption? The announcement, light on details, generated a flurry of questions and not a little anxiety among pharma executives.
For the world’s pharmaceutical giants, however, the blow may be softened—at least for now. AstraZeneca quickly announced that it expects to be exempt from the new tariffs, citing its significant U.S. manufacturing operations and ongoing construction of new facilities. Novartis echoed this confidence, noting that it not only has projects underway but also plans to announce additional U.S. investments before the year’s end. Novo Nordisk, meanwhile, pointed to its $4.1 billion expansion in North Carolina, where cranes are already rising and the project is halfway complete. "Right now, cranes are rising at Novo Nordisk’s U.S. manufacturing site in North Carolina, where we are halfway through a $4.1 billion expansion," said Chief Executive Mike Doustdar through a spokeswoman, according to The Wall Street Journal.
These announcements are not coincidental. For years, big drugmakers have been bracing for tariff threats from the Trump administration, pledging to invest more than $350 billion in U.S. manufacturing, research and development, and other critical functions. Some, like Eli Lilly, have even rushed to import and stockpile key products in anticipation of the new tariffs taking effect on October 1.
But while the pharmaceutical titans may find ways to navigate—or even sidestep—the new rules, smaller biotech firms are bracing for impact. Many of these companies produce only one or two specialized drugs and rely heavily on overseas contract manufacturers. They lack the capital and scale to rapidly establish domestic facilities. John F. Crowley, chief executive of the Biotechnology Innovation Organization, didn’t mince words: "The immediacy of punitive, 100% tariffs on innovative medicines for any company without ‘shovels in the ground’ would devastate our nation’s small and midsize biotechnology companies. Most of these companies do not have access to the significant capital needed to immediately establish manufacturing in the U.S."
Adding to the confusion are unresolved questions about how exemptions will be enforced. Will a single construction project cover all a company’s products, or must each drug be individually manufactured in the U.S. to qualify? And what about existing trade agreements with the European Union and Japan that cap tariffs at 15%? According to Morningstar analyst Jay Lee, if the EU and Japan are excluded, the new tariffs will likely hit drugs made in the U.K., Singapore, and Switzerland the hardest. Companies such as GSK, Novartis, and Roche, which have significant manufacturing in those countries, could be vulnerable—unless their U.S. expansion projects suffice for exemption.
Even the mechanics of enforcement are murky. As BMO Capital Markets biopharma analyst Evan Seigerman pointed out, "New plants take years to build and likely won’t be completed until after Trump’s second term ends." The lack of clarity, he suggested, reflects the complexity of the sector and the challenges of implementing such a sweeping policy without detailed guidance. Bernstein analysts, meanwhile, described the new tariffs as "a pretty good outcome" for the industry—assuming the EU is capped at 15%—and noted that Trump’s plan offers a "get out of jail free card" for companies willing to invest in U.S. manufacturing.
But pharmaceuticals are only half the story. The Trump administration is also preparing a bold new tariff regime for the semiconductor industry, one that could reshape global technology supply chains. According to The Wall Street Journal, the White House is weighing rules that would require chipmakers to match U.S. semiconductor production with the volume imported from abroad. If they fall short, companies could face tariffs on their imports—a move designed to pressure both buyers and chipmakers to shift procurement toward U.S.-made supplies.
The strategy aims to slash America’s reliance on foreign suppliers, especially as much of the world’s advanced chip production is concentrated in Taiwan—a region seen as vulnerable to Chinese military pressure or natural disasters. Semiconductors are the backbone of nearly every modern device, from smartphones and cars to weapons systems and industrial equipment. A sudden disruption in supply could ripple across industries, shutting down factories and stalling critical technology.
The plan would hit companies like Apple and Dell the hardest. Their products are built from parts sourced and assembled across multiple countries, and compliance would require tracing the origins of every chip and matching that volume with domestic supply. By contrast, firms ramping up U.S. capacity—such as TSMC, Micron Technology, and GlobalFoundries—could gain leverage, their investments positioning them as safer bets for buyers looking to avoid tariffs.
Still, industry executives caution that realigning chip supply chains is no small feat. American-made chips cost more than imports, and some specialized components simply can’t be manufactured locally—at least not yet. "America cannot be reliant on foreign imports for the semiconductor products that are essential for our national and economic security," White House spokesman Kush Desai stated, according to The Wall Street Journal. But he also urged caution, noting that "unless officially announced by the administration, however, any reporting about our policymaking should be treated as speculative."
Trump’s approach isn’t entirely new. In August 2024, he announced that tech companies expanding U.S. manufacturing could avoid steep semiconductor tariffs, spurring investment commitments from giants like Google and Apple. The administration’s carrot-and-stick tactics—praise one day, tariff threats the next—have become a familiar part of its negotiations with the tech sector.
Beyond pharmaceuticals and semiconductors, the administration is also moving forward with a $14 billion TikTok deal, keeping the popular social media app under close government oversight. While the TikTok negotiations are a separate matter, they underscore the White House’s broader strategy: use the tools of trade and regulation to bring more critical industries under American control.
As the dust settles, one thing is clear: Trump’s latest tariff threats have set off a scramble in boardrooms and factories across two of the world’s most vital industries. Whether these policies spark a renaissance in American manufacturing or create new headaches for global supply chains remains to be seen. But for now, the message from Washington is unmistakable—build it here, or pay the price.
