President Donald Trump’s latest trade maneuver has sent shockwaves through the pharmaceutical industry and reignited fierce debate over the wisdom of tariffs as economic policy. On September 28, 2025, Trump announced a sweeping plan to impose a 100% tariff on branded and patented drugs that are imported into the United States, unless companies begin US-based manufacturing construction by October 1. The move, reported by Bloomberg, threatens to double the cost of blockbuster medicines—ranging from cutting-edge cancer immunotherapies to popular weight-loss treatments—unless drugmakers act quickly to localize their production.
The impact is potentially enormous. According to Bloomberg Intelligence economists Nicole Gorton-Caratelli and Maeva Cousin, the tariffs could affect about $220 billion worth of US pharmaceutical imports and raise the average tariff rate by 3.3 percentage points. While some companies, including Novartis AG and Sanofi SA, have announced large investments in US manufacturing, the extent to which these projects have progressed remains unclear. Others, like Merck & Co., Novo Nordisk A/S, and Eli Lilly & Co., have already broken ground on new facilities in states such as Delaware, North Carolina, and Texas. AbbVie, which co-markets the cancer drug Imbruvica and produces the immunology blockbuster Skyrizi, has stated it will begin expanding its Illinois facilities this fall.
The Trump administration’s rationale for the tariffs is rooted in a desire to bring pharmaceutical manufacturing back to US soil—a campaign promise that resonates with voters worried about supply chain vulnerabilities and the high cost of medicines. But the policy’s suddenness and scope have left industry insiders scrambling. As Bloomberg notes, there is considerable uncertainty about how exemptions might be handled, particularly for countries with US trade deals or for companies whose facilities are already “under construction.” Analysts at Leerink Partners have flagged a host of unanswered questions, including whether using US-based contract manufacturing sites will qualify companies for the exemption, and if the tariffs can withstand potential legal challenges.
The announcement triggered immediate market reactions. Shares of major pharmaceutical firms fell across Tokyo, Seoul, and Hong Kong as investors digested the implications for Japanese blockbusters like Chugai Pharmaceutical Co.’s Hemlibra and Daiichi Sankyo Co.’s Enhertu. Shionogi & Co. is still weighing whether to shift production of its antibiotics for multi-drug resistant bacterial infections to the US—a decision now thrust into the spotlight. In a rare bright spot, Fujifilm Holdings Corp., which recently opened one of North America’s largest cell-culture biomanufacturing plants in North Carolina, saw its shares jump by as much as 5.2% in Tokyo trading. The new facility is being touted as a model for the kind of domestic capacity the administration wants to encourage.
For Asian drugmakers, the operational impact may be muted, at least in the short term. Tony Ren, head of Asia healthcare research at Macquarie Securities Ltd., told Bloomberg, “For Japan, it’s more likely to be an impact on sentiment, but less of an impact on fundamentals,” noting that few Chinese, Indian, or Korean firms sell branded drugs directly in the US. Instead, most Chinese pharmaceutical companies operate through partnership models with multinational firms, insulating them from the immediate effects of the tariffs. Only BeOne Medicines, a Chinese-origin company now based in Switzerland, is generating significant US sales, with its cancer therapy Brukinsa partly manufactured by a US contractor—a situation that underscores the complexities of defining what counts as an import.
Still, Morgan Stanley analysts warn that the tariffs could complicate Chinese companies’ long-term ambitions to expand directly into the US market. Their “moonshot” pathway to American operations “may face another layer of uncertainties, if the tariff barriers are to stay,” the analysts wrote. The policy’s ripple effects are already being felt in boardrooms and on trading floors around the globe.
Yet the pharmaceutical sector’s scramble is just one chapter in a broader—and increasingly contentious—story about tariffs under the Trump administration. In a week marked by political contradictions, many Republicans who have long railed against tax increases and executive overreach have remained conspicuously silent as Trump unilaterally imposes massive new tariffs on imported goods, according to a critical analysis published in Article 2. The administration’s approach has drawn fire from both economists and political opponents, who argue that the tariffs amount to a tax hike on American consumers and businesses.
The president, for his part, has defended his policies with characteristic bravado. On Thursday, September 25, 2025, Trump told reporters, “We’re going to take some of that tariff money that we made, we’re going to give it to our farmers, who are, for a little while, going to be hurt until the tariffs kick into their benefit.” The plan, in essence, uses tariff revenue to bail out American farmers stung by retaliatory measures from trading partners—a cycle that critics say only compounds the economic pain.
There are broader economic consequences, too. The nonpartisan Tax Foundation projects that over the next decade, Trump’s tariffs will result in a lower Gross Domestic Product, a smaller capital stock, and 825,000 fewer full-time jobs. Inflation, already stubbornly above the Federal Reserve’s 2% target, has been exacerbated by the higher costs associated with tariffs. As the analysis in Article 2 puts it, “It’s a classic case of a wannabe central planner not understanding economic tradeoffs.” While some domestic jobs may be saved or created, “many more will be lost as a consequence.”
The administration is also fighting to preserve its tariff authority in the courts. In arguments before the Supreme Court, government lawyers have claimed that tariffs are promoting “peace and unprecedented economic prosperity” and that removing tariff authority would “expose our nation to trade retaliation without effective defenses and thrust America back to the brink of economic catastrophe.” At the same time, the administration has expressed concern over foreigners owning $26 trillion more in US assets than Americans own abroad, even as it touts deals for foreign investment in the US economy. The contradictions have not gone unnoticed by analysts and critics alike, who question whether the policies are achieving their intended goals or simply fueling uncertainty.
For pharmaceutical companies, the stakes could hardly be higher. With only days to spare before the October 1 deadline, firms must decide whether to accelerate US-based construction or risk seeing their most lucrative products priced out of the American market. The policy’s long-term effects—on innovation, access to medicine, and the global competitiveness of the US pharmaceutical sector—remain to be seen. But one thing is clear: the intersection of trade, health, and politics has rarely been more fraught, or more consequential, than it is right now.
