The British pharmaceutical industry faces renewed uncertainty following Donald Trump’s threat to impose staggering 100% tariffs on branded drugs starting next week. This move has sparked significant concern, particularly as the sector was conspicuously left out of a trade deal negotiated by Keir Starmer five months ago, which covered industries like cars and steel. Despite a promise of “preferential treatment” from Trump in May, the UK’s drugmakers are now in the direct line of fire.
In response, a British government spokesperson acknowledged the widespread anxiety within the industry. They confirmed that officials have been “actively engaging with the US and will continue to do so” to mitigate the potential damage. The government emphasized the critical role of pharmaceuticals in the national economy and pledged to push for outcomes that reflect the strong bilateral relationship and benefit UK businesses.
The tariff announcement casts a shadow over the recent diplomatic efforts, including a state visit where the UK rolled out the red carpet for Trump. The presence of pharmaceutical leaders like GSK’s Emma Walmsley at a lavish banquet hosted by King Charles did little to shield the sector, leaving it in a state of limbo. The new duties also include a 25% levy on heavy-duty trucks and a 50% tariff on kitchen and bathroom cabinets.
However, some market analysts believe the threat might be less severe than it appears. Lale Akoner of eToro suggested the tariffs are likely aimed at companies without a manufacturing presence in the United States. She noted that many global giants, including AstraZeneca, are already establishing US plants, which would probably exempt them from the duties. This view was echoed by Swiss firms Roche and Novartis, who expect to avoid the tariffs due to their ongoing investments in American facilities.
Meanwhile, other European industries are voicing their alarm. The German auto trade body, the VDA, labeled the 25% tariff on trucks “incomprehensible,” highlighting the potential harm to US jobs, supply chains, and investment. The move has already impacted the market, with shares in major truck manufacturers like Daimler Trucks and Traton Group declining following the announcement.