After Trump announced 100% tariffs on imported drugs Thursday evening, investment banks including UBS have been telling clients that the actual impact of this policy may be minimal. Analysts point out that since major pharmaceutical companies have already invested hundreds of billions of dollars in building production facilities in the United States, most companies can obtain tariff exemptions.
According to reports, on September 25 local time, US President Trump announced on his social media platform "Truth Social" that starting October 1, the United States will implement a new round of high tariffs on multiple categories of imported products, including a 100% tariff on patented and branded drugs.
According to Trump's statement on social media, the 100% tariff on "any branded or patented drugs" will take effect from October 1, but companies building pharmaceutical production plants in the United States can receive exemptions. This exemption clause is defined as "breaking ground" or "under construction" - as long as construction begins, no tariffs need to be paid.
Asian stock markets fell Friday due to the tariff news, with Asian pharmaceutical stocks declining. However, major European pharmaceutical stocks performed relatively stable after Trump's overnight announcement of drug import tariffs. The market generally believes that given major pharmaceutical companies already have substantial US production layouts, the actual impact of the new tariff policy is limited.
Analysts expect this policy to be more symbolic in nature, aimed at promoting pharmaceutical industry reshoring to the United States rather than truly targeting imported drug trade.
According to Bloomberg economists' analysis, the countries most affected by this move are Singapore and Switzerland. The UK also has some significant pharmaceutical exports to the US - its trade agreement with the US mentions that if new Section 232 tariffs emerge, special tax rates will be considered, but no formal rate agreement has been reached. Japan appears to have similar arrangements.
**Major Pharma Companies Have Invested Hundreds of Billions, Impact May Be Negligible**
UBS analyst Joe Dickinson stated in a research report that considering the massive investments major pharmaceutical companies have committed over the next five years, market expectations for the actual impact of 100% product tariffs may still remain low.
Specific investment data shows: AstraZeneca has committed to invest $50 billion, Roche $50 billion, GlaxoSmithKline $30 billion, Novartis $23 billion, UCB $2 billion, and Sanofi $20 billion.
Vontobel analyst Sibylle Bischofberger Frick noted: "All major pharmaceutical companies have business presence in the United States, and almost all companies have announced large-scale investment plans for the coming years."
Mizuho Securities healthcare specialist Jared Holz stated in a report that while the announcement is straightforward, its impact may range between ambiguous and negligible. All major players have some production operations in the United States, and almost all companies have announced increased investments directly related to local manufacturing.
According to data from the Biotechnology Innovation Organization, nearly 90% of US biotech companies rely on imported components for at least half of their approved products, highlighting the complexity and interconnectedness of the global pharmaceutical supply chain.