Trump Governance’s trade Strategy: A Sigh of Relief, But for How Long?

The recent proclamation from the Trump administration regarding mutual tariffs initially brought a collective sigh of relief too the domestic pharmaceutical and biotechnology sectors. While pharmaceuticals were excluded from the initial round of tariffs, which impose a base 10% tariff on all imports and additional tariffs on approximately 60 trade partners (with Korea facing a 25% tariff starting April 9th, excluding semiconductors, wood, copper, and pharmaceuticals), industry insiders remain cautiously optimistic.

The Looming Threat of Item-Specific Tariffs

Despite the current exemption, the possibility of future item-specific tariffs, notably on pharmaceuticals, looms large. President Trump has repeatedly hinted at such measures, even stating that pharmaceutical tariffs are a “separate category” under consideration. This suggests a potential shift in trade policy that could substantially impact the industry.

The pharmaceutical tariff is a separate category (with existing tariffs). we are planning to announce drug tariffs in the near future and are currently considering.
president Donald Trump, White House Press Briefing, April 3, 2025

This uncertainty has prompted pharmaceutical companies to intensify their lobbying efforts, urging the US government to implement any potential tariffs in a phased manner. This approach would provide them with crucial time to adjust their manufacturing operations and perhaps relocate facilities to the United States, mitigating the financial burden of tariffs. According to a recent Reuters report, this phased approach is a key focus of ongoing discussions between industry representatives and the administration.

Industry Concerns and the Need for Government Intervention

The biotechnology industry, in particular, is expressing heightened concern over the potential for item-specific tariffs. industry leaders emphasize the need for proactive government intervention to safeguard their interests. Given the limitations of individual companies in negotiating directly with the US government, a comprehensive, government-led trade strategy is deemed essential.

Trump tariff bombs will eventually increase local production facilities, but the term of Trump government is four years. Strategically, domestic pharmaceuticals and bio companies shoudl listen to the labor costs and profitability issues of the government and to solve diplomacy and normal diplomacy.
Lee Seung-gyu, Vice Chairman, Korea Bio Association

Lee Seung-gyu, vice Chairman of the Korea Bio Association, highlights the potential for tariffs to incentivize the relocation of production facilities. However, he stresses the importance of strategic diplomacy and addressing labor cost and profitability concerns in collaboration with the government.

Political Instability and Policy Continuity

Compounding these concerns is the current domestic political landscape. The upcoming early presidential election, scheduled for June 3rd, introduces uncertainty regarding the continuity of government policy. The new administration will need to act swiftly to address the potential imposition of tariffs on pharmaceuticals by the US.

An industry official noted that while pharmaceutical companies anticipate minimal impact on US customs and exports, biotechnology firms with a high dependence on US exports face a more important threat. This disparity underscores the need for targeted policy interventions to support the biotechnology sector.

The dismantling of the National Bio Commission, previously under the direct control of the president, further exacerbates these concerns. This commission played a crucial role in coordinating bio policy, from research and development to licensing, with the goal of fostering the development of blockbuster drugs. Its absence creates a void in policy oversight and coordination.

There is a tendency to approach bio-related policies from narrow field of view, so the government’s policy continuity is urgently needed.
Lee Seung-gyu, Vice Chairman, Korea Bio association

Lee emphasizes the need for the government to move beyond mere slogans and provide concrete policy support to foster a thriving bio industry ecosystem. He cautions against a narrow approach to bio-related policies, advocating for a comprehensive and sustained commitment to the sector.