German pharma warns Trump tariffs risk global crisis

The German pharmaceutical industry has raised alarm over U.S. President Donald Trump’s decision to impose sweeping 100 per cent tariffs on imported medicines beginning October 1, calling it a direct threat to international supply chains and patient access to life-saving drugs.

The announcement, made earlier this week by Trump as part of his broader “America First” trade push, marks a sharp departure from existing transatlantic trade agreements.

Under current arrangements between the European Union and the United States, pharmaceutical tariffs are capped at 15 per cent.

Germany’s Verband Forschender Arzneimittelhersteller, VFA, the association representing research-based pharmaceutical companies, said the new tariffs would have devastating effects.

“If the plans are implemented as announced, this would be a severe setback for Germany and Europe as pharmaceutical industry locations,” warned Han Steutel, VFA president.

He added that the measures would “endanger patient supply in both the U.S. and Europe” by raising costs, disrupting established trade flows, and slowing down the delivery of critical medicines.

Germany’s pharmaceutical sector is particularly exposed to the U.S. market. The United States is the single largest buyer of German medicines, accounting for roughly one-quarter of total exports.

In 2024 alone, pharmaceutical goods valued at 27 billion euros (about $31.5 billion) were shipped across the Atlantic. Companies like Bayer and Merck, which are household names in the global drug market, rely heavily on this trade.

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The sector itself supports around 130,000 jobs in Germany, making it a pillar of the economy as well as a driver of innovation in healthcare.

For many industry players, Trump’s move appears to be a calculated attempt to force pharmaceutical giants to relocate production to the United States.

Indeed, the president has said that companies investing in domestic pharmaceutical production would be exempt from the tariff hike.

While this creates a potential path to circumvent the new rules, European firms say it amounts to coercion and undermines free trade principles.

“International supply chains in pharmaceuticals are designed for efficiency and reliability. Disrupting them with tariffs this extreme does not just make production more expensive—it creates uncertainty for patients who depend on timely access to medicines,” Steutel explained. He emphasized that both sides of the Atlantic stand to lose, as higher costs and bottlenecks could delay treatments in America as much as in Europe.

The industry association is now urging both Berlin and Brussels to pursue rapid negotiations with Washington to avert the tariffs. Steutel also used the crisis to highlight a long-standing problem within Europe: the lack of a fully integrated single pharmaceutical market.

“In the U.S. you can supply 300 million people at a stroke,” he said. “In Europe, it is 450 million people, but spread across 27 markets. We are not exploiting our potential as a single market and are thus becoming a pawn of the major economic areas.”

Experts warn that the stakes go beyond Germany. If tariffs are implemented, pharmaceutical producers across the EU would face similar disruptions, potentially destabilizing the continent’s role as a global hub for drug innovation and export. Smaller firms may struggle to absorb the shock, and patients could be hit hardest if drug availability falters.

The move also risks escalating transatlantic trade tensions at a time when both sides are already grappling with challenges ranging from energy security to the aftermath of the COVID-19 pandemic.

Analysts say the dispute could spill into other sectors, potentially igniting a broader trade war that would harm industries far beyond pharmaceuticals.

For now, European officials have yet to outline a formal response, but pressure is mounting. With just days until the tariffs are scheduled to take effect, the pharmaceutical sector is bracing for impact while lobbying hard for urgent diplomatic intervention.

As Steutel concluded, “What is at stake is not just trade flows or profits, but the ability of millions of patients to access safe, affordable medicines when they need them.”

NAN