US President Donald Trump announced a new round of tariffs on Thursday evening, with the pharmaceutical industry expected to be the hardest hit.
Trump revealed that the US will impose a 100 per cent tariff on imported branded drugs, a 25 per cent tariff on all heavy-duty truck imports, a 50 per cent tariff on kitchen cabinets, a 50 per cent tariff on bathroom vanities, and a 30 per cent tariff on upholstered furniture.
All the new duties are set to take effect on 1 October.
As a result, shares in Europe’s largest pharmaceutical companies fell in early Friday trading. Novo Nordisk, Roche, Novartis, and AstraZeneca all dropped between 1.8 per cent and 2 per cent on the Tradegate platform.
Major drug companies had anticipated this move, warning earlier in the year that Americans would suffer the most if Trump imposed tariffs on pharmaceuticals.
According to the Census Bureau, the US imported nearly $233bn in pharmaceutical and medicinal products in 2024.
The top countries where major US pharmaceutical companies operate for sales, manufacturing, or research and development include China, the Netherlands, Japan, Germany, Canada, the UK, Belgium, Ireland, Mexico, and Switzerland.
Trump stated on Truth Social that the pharmaceutical tariffs would not apply to companies building manufacturing plants in the US, which he defined as either “breaking ground” or “under construction”.
Ireland has more than 90 pharmaceutical companies based on the island, including some of the top US pharma giants, such as Pfizer, Eli Lilly, and Johnson & Johnson, due to its favourable corporate tax rates.
Drug pricing row
The US giant is also based in the UK, and the Labour government had planned for the life science sector to be a key pillar of the economy, but it has also been involved in a drug pricing row.
Last week, it was reported that major pharmaceutical companies had either abandoned or paused a nearly £2bn planned investment in the UK. This included US drugmaker MSD scrapping its £1bn London centre and Merck pulled out of a planned £1bn London drug research centre.
Pharma companies have accused the UK government of not spending enough on new medicines, arguing that there is little incentive for them to develop drugs and test them in a country that does not value innovation sufficiently.
Science minister Patrick Vallance has recently said the price the NHS pays for medicines will need to rise to end the feud with pharmaceutical companies and stop the exodus of investment.