The decision by the United States to introduce 100% tariffs on pharmaceutical products starting October 1 is emerging as one of the most serious challenges for Germany and Europe in recent years. The move is viewed not only as a blow to European manufacturers’ economic interests but also as a threat to the stability of the global healthcare system.
Industry Voices Concern Over Supply Chains
The German Association of Research-Based Pharmaceutical Companies (VFA) has already expressed alarm over the planned measures. Industry representatives warn that such sweeping trade barriers will dismantle well-established international supply chains. The consequences, they argue, will include rising production costs, reduced access to life-saving medicines for patients in both the US and Europe, and major disruptions in global drug distribution.
Pharmaceuticals are a high-tech sector requiring constant investment in research and development. Any freeze in investment, which is already occurring in anticipation of the tariffs, could undermine Europe’s competitive position in the global market.
Germany Faces a Direct Hit
The decision is particularly painful for Germany, where around 130,000 people are employed in the pharmaceutical sector. A significant portion of production is exported to the US, which in 2024 accounted for €27 billion worth of German pharmaceutical exports — roughly one quarter of the country’s total. With the US as Germany’s largest external market, any restrictions directly endanger jobs, tax revenues, and innovation potential.
Trump’s Protectionist Agenda
The administration of President Donald Trump, prioritizing protectionism and domestic production, has made reducing dependence on foreign supply chains a central goal. At the same time, it seeks to address domestic political pressure by cutting drug prices. A decree signed by Trump in May aims to reduce the cost of pharmaceuticals in the US by 59–90%. However, instead of reforming the healthcare system or lowering administrative costs, Washington is applying pressure on foreign producers and incentivizing localization of production.
The 100% tariffs on branded and patented medicines effectively double import costs. Exemptions exist only for companies already building factories in the US, creating a strong incentive for multinational corporations to relocate production across the Atlantic.
Europe’s Strategic Weakness
While this policy may boost US domestic production, it simultaneously weakens European economies, particularly Germany and Switzerland, which are long-standing pharmaceutical hubs. Beyond the direct economic impact, Europe faces a deeper strategic vulnerability. The EU’s market of 450 million consumers has enormous potential but remains fragmented into 27 national markets with varying rules on regulation and pricing. This fragmentation undermines competitiveness compared with the more unified US market.
As a result, Europe risks becoming a “pawn on the global chessboard” between the two major economic blocs of America and Asia. The introduction of US tariffs may accelerate this trend, leaving Europe with weakened leverage in global trade and healthcare security.
