Trump says drug tariffs are coming, but stocks are rising

Shares of some drugmakers rose Wednesday after President Donald Trump suspends sharp tariff rates in dozens of countries and said it would temporarily ease fears about the potential tariff impact on drugs imported into the US.

Wednedsay’s Trump announced that he would reduce tariffs in most countries to 10% in 90 days, but would soon raise China’s tariffs to 125%. However, the suspension does not seem to apply to sector-specific tariffs.

Pharmaceutical stocks fell on Wednesday after doubled its plans to impose drug-specific tariffs in Trump’s comments a day ago.

Stocks of most US-based companies went positive on Wednesday Eli Lily, Abbvie, Bristol Myers Squibb, Regeneron, Merck, Pfizer, Johnson & Johnson and amgen It fell by at least 2% to 4% within the day. Some stocks of foreign companies AstraZeneca, Novo Nordisk and NovartisHe was also positive while a British drug maker. GSK It was still down 5%.

Trump on Tuesday said his administration would “will soon announce “major” tariffs ‘soon’, despite the market fallout from his global taxation, according to several reports. He exempted the drug from his sweeping tariffs last week, announced in a drugmaker’s temporary relief.

The president said tariffs would encourage pharmaceutical companies to move manufacturing operations to the United States. This is because domestic manufacturing in the pharmaceutical industry has been shrinking dramatically in recent decades, with a critical portion of the production process moving to China, India and other countries with low labor and other costs.

According to the UN Contrade Database on International Trade, US imports reached nearly $213 billion in 2024.

However, Wall Street analysts and businesses are raising concerns that re-examination of domestic production on a re-landing basis could be difficult, costly, and could take years, disrupt the pharmaceutical supply chain and increase drug costs for patients. Drugmakers rely on a complex network of manufacturing sites. This depends on different countries and sometimes in different countries for different steps in the production process.

“The global supply chain is complex, and pharma is the most common. It’s not as easy as moving where someone screws a small screw to make an iPhone.”

He said tariffs will return to the US “almost changing manufacturing” as businesses already operate robustly within the country.

Seigerman said he expects most large pharmaceutical companies to “establish a goal of waiting for Trump’s presidency to consider a more permanent manufacturing decision.”

House Democrats are also reportedly urging the administration to protect medical supplies chains from what the trade war could potentially have on US patients.

“Disruptions in the supply of critical medical products can inevitably injure US patients, force providers to make impossible ration decisions, and could even be replaced due to delayed treatment or for less effective alternatives.

Some companies that have invested billions to boost US manufacturing and build goodwill with Trump have pushed back tariffs as they warn about the potential impact on industry and patient research and development.

“We can’t infringe these contracts, so we have to eat the tariff costs and make trade-offs within our company,” Eli Lily CEO Dave Licks told the BBC in an interview.

“Usually, it’s a reduction in staff or research and development and we expect R&D to be the first to come. That’s a disappointing result,” Rix said.

In March, J&J announced a $55 billion new investment in US manufacturing, research and development and technology over the next four years. The company has not commented on customs duties.