The medicine manufacturers from Europe are bracing for President Donald Trump’s plan to slap tariffs of almost 250% on medicine imported from the EU.
The declaration made by Trump that the drug exports of Europe will be hit with certain new taxes starting next week, which is most likely going to be from 11th August, has already triggered a slide in their share prices, with the benchmark Stoxx Health Care Index dropping 2.8% to its lowest level since mid-April 2025.
The fact is that investors have been very worried about the plans from Trump ever since he first announced back in April 2025 that he was actually preparing steep tariffs for many countries as well as industry sectors and that he was minded to target the medicine manufacturers from Europe in a step to persuade them so as to relocate to the US.
Trump has repeated that threat again, telling the US business news broadcast CNBC that they will be putting an initially small tariff when it comes to pharmaceuticals, but in a year or a year and a half tops, it is going to be 150%, and then it is going to be 250% since they want the pharmaceuticals to be made within their country.
It is well to be noted that medicines that are made in the EU and exported to the US would otherwise be subject to somewhere around a 15% tariff as applicable under the terms of the US-EU trade deal, which has been agreed upon by both sides on July 27.
Apparently, there are many medicine manufacturers from Europe that have already signaled that they are going to comply with the demands of Trump, with AstraZeneca, the UK medicine maker, saying in July 2025 that it is going to invest $50 billion in the US in order to ensure that it can locally manufacture all its drugs that are selling there.
The chief executive of AstraZeneca, Pascal Soriot, was quoted by the Guardian newspaper as saying that there are a couple of products that are not made in the US, but they are rapidly transferring the supply to the US as they have the capacity.
The newspaper further said that the chief executive of GSK, the multinational pharmaceutical and biotechnology company, Emma Walmsley, has remarked that they are also planning to invest tens of billions of dollars in the US in the next five years.
Roche and Novartis, the Swiss drugmakers, have also said that they will be investing quite heavily in US drug manufacturing. The head of the government of the Republic of Ireland, Michael Martin, said in response to the tariff threat by Trump that such policies are not going to be in the best interest of the US.
He added that the United States has gained a lot of share of the European pharmaceutical market and also many Asian markets due to their presence in those markets. The point is that US companies are globally robust companies due to the fact that they are present in Europe. According to him, those companies are going to be damaged if such kinds of tariff policies were to bear fruit, and therefore, it could very well trigger a trade war.
