Trump threatens 200% drug tariff as AstraZeneca leads $50 billion US investment
WASHINGTON (TNND) — President Donald Trump announced on Monday that British-Swedish drugmaker AstraZeneca will be investing $50 billion in the United States by 2030. This is just one of many significant investments from pharmaceutical companies, with many companies reacting to Trump's threat of imposing a 200% tariff on imported drugs.
The investment will expand research and development and cell therapy manufacturing, with a new drug manufacturing facility being built in Virginia. AstraZeneca will also improve its clinical trial network within the United States and support investments in novel medicines.
The drug maker said the facility will be the largest in its history. The money will also go towards facilities in California, Indiana, Maryland, and Texas. According to the CEO of AstraZeneca, Pascal Soriot, the funds “underpin our belief in America’s innovation in biopharmaceuticals and our commitment to the millions of patients who need our medicines in America and globally.”
AstraZeneca said that its goal is to drive up its annual revenue to $80 billion, with the United States accounting for 40% of revenue in 2024.
Trump has called for the reduction of drug prices by up to 80% in the United States, with the president signing an executive order in May to "reduce price disparities at home." Health and Human Services Secretary Robert F. Kennedy Jr. explained that the order will require the federal government to tie what it pays pharmaceutical companies for those drugs to the price paid by a group of other, economically advanced countries, also called the "most favored nation" approach.
Trump told reporters at the White House that the U.S. won't tolerate "profiteering and price gouging from big pharma," while blaming countries for forcing pharmaceutical companies "to do things that, frankly, I'm not sure they really felt comfortable doing."
"For decades, Americans have been reliant on a foreign supply of key pharmaceutical products. President Trump and our nation’s new tariff policies are focused on ending this structural weakness," said Commerce Secretary Howard Lutnick as part of the announcement.
Trump has said that he will give pharmaceutical companies around a year to move their manufacturing facility to the United States while toying with the idea of a 200% percent tariff.
As of right now, the United States and the European Union are playing hardball as both sides try to reach a trade deal before Aug. 1. Trump has suggested that a pharmaceutical tariff could start by then.
European officials have been saying they are hoping to reach a deal before the deadline, but have also threatened to impose retaliatory tariffs on a wide range of American goods.
Some officials have also supported using its “anticoercion” instrument as a pushback against Trump, which is a legal tool allowing the bloc to counter economic strong-arming with restrictions on trade and investment. It has never been used before and would be a significant escalation in a winding dynamic with Washington since Trump returned to office.
European Commission President Ursula von der Leyen said earlier this month that the anticoercion instrument was created for emergencies, “and we are not there yet.” But if that conclusion were to change in the face of 30% baseline tariffs in addition to specific industry tariffs like cars and pharmaceuticals.
AstraZeneca currently generates more than 40% of its revenue within the United States.
