Trump Tariff Threat Prompts $50B Roche, $23B Novartis US Investments; 31% Swiss Export Tariff Looms

President Donald Trump has announced potential new tariffs targeting medicines and chemicals, the European Union's largest export sector to the United States. This move comes amid escalating trade tensions, with pharmaceuticals and chemicals representing a major component of transatlantic commerce.

In response, global pharmaceutical companies are accelerating investments in US-based manufacturing. Roche, which generated 48% of its 2024 sales in the US and employs 25,000 people across 24 sites, has announced a $50 billion investment over five years, creating more than 12,000 jobs and expanding facilities in Kentucky, Indiana, New Jersey, and California. Novartis plans a $23 billion US investment, while Eli Lilly and Johnson & Johnson have also made major US manufacturing commitments. Japanese firm Fujifilm has invested $4 billion in US facilities and signed a $3 billion supply deal with Regeneron.

The US accounts for 40% of global pharmaceutical sales and imported $213 billion in pharmaceuticals in 2024. The Trump administration has begun investigating drug imports, with a 31% tariff on Swiss exports under discussion. Key products affected could include Ozempic, Ocrevus, and Xolair.

Analysts note that companies with US-based manufacturing and intellectual property are likely to be less affected by tariffs. High-tax US biotech firms are seen as safer investments, while smaller drugmakers may become takeover targets. Nathan Moser of Impax warns that tariffs could disrupt global supply chains, but also sees potential opportunities in the biotech sector.