Pharmaceutical firms, Trump's next target - EU companies may move to the US, in case of tariffs
Pharmaceutical companies in the EU have warned of a "risk of exodus" to the US, as shares in the sector fell worldwide after Donald Trump threatened to impose tariffs on imports of American drugs.
European healthcare stocks fell 3.9%, reaching their lowest level since October 2022. AstraZeneca shares also fell more than 5%, GSK more than 4% and Roche 5.6%.
Trump imposed new tariffs on imports from 57 countries and territories, including a 20% tax on goods from the 27 EU member states, 104% on China and 27% on India. These followed 10% duties on imports from all countries imposed last Friday.
Pharmaceutical products have so far been exempt from the tariffs, but the US president said he would announce a large tariff on drug imports "very soon." He claimed that this would encourage pharmaceutical companies to move their operations to the US, but gave no further details.
The European Federation of Pharmaceutical Industries and Associations, whose members include Bayer, Novartis and Novo Nordisk among many others, held a meeting with von der Leyen, hours before Trump issued his new threat.
The US leader's recent comments have intensified tensions in pharmaceutical manufacturing hubs across Europe, including Ireland, which exported €44 billion in pharmaceutical products to the US in 2024, most of which are manufactured by US multinationals that Trump wants to repatriate.
"We're going to put tariffs on our pharmaceuticals, and as soon as we do that, they're going to rush back to our country, because we're the big market, that's the advantage we have over everyone else. So, very soon we're going to announce a big tariff on pharmaceuticals," the US president said.
The European Federation of Industry has warned President von der Leyen about the risk of an exodus to the US, adding that "if Europe does not offer rapid and radical policy changes, then pharmaceutical research, development and production are increasingly likely to be directed towards the US."
According to her, capital expenditure, money invested in manufacturing plants and research and development were the main risks. The data shows that pharmaceutical companies in the EU plan to invest 164.8 billion euros in the period 2025-2029.
"Over the next three months, the companies that responded estimate that a total of 16.5 billion euros, or 10% of total investment plans, is at risk," the Federation announced. The document states that the US is becoming a favorite destination for investment and tariffs accelerate this, putting hundreds of thousands of jobs at risk.
"The US leads Europe in every investor metric, from capital availability, intellectual property, speed of approval to rewards for innovation. Now with the addition of tariffs, there is little incentive to invest in the EU and significant incentives to relocate to the US," the document explains.
The federation presented von der Leyen with a five-point plan, including strengthening incentives to locate intellectual property in Europe and adopting a set of rules worldwide to make it more attractive to locate innovation, research and development on the old continent.
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