The past year has proven tumultuous for life sciences companies, whose pharmaceutical products, active ingredients, and medical devices sit squarely in the crosshairs of the Trump Administration's trade agenda. In September 2025, these challenges were punctuated by Trump Administration threats to impose tariffs of up to 100% on pharmaceutical goods.
In this post, we take stock of these challenges, focusing on emerging risks stemming from new tariffs implemented over the past year, public statements promising additional tariffs following the Supreme Court’s ruling in Learning Resources, and a series of international deals and manufacturer-specific agreements. These developments present strategic considerations for life sciences companies seeking to mitigate risk.
New Tariffs Strain Supply Chains
Over the past year, the Trump Administration has targeted the pharmaceutical sector as part of an effort to push companies to build new US manufacturing facilities.
Companies with supply chain exposure to certain countries have faced more volatile tariff rates than others. For instance, certain imports from China faced combined US tariff rates of up to 170% during 2025, and imports from India were targeted with a special 25% tariff connected with India’s purchasing of Russian oil.
The shifting and interlocking nature of new tariffs, trade agreements, and manufacturing deals have created challenges for biopharma companies seeking to optimize supply chains and minimize future uncertainty. Given the significant investment that manufacturing facilities require, companies must balance short-term tariff risks against long-term, difficult-to-predict risks that may result from later trade policy shifts.
Future Tariffs and Trade Deals Remain Fluid
Although the Supreme Court struck down tariffs imposed under the International Emergency Economic Powers Act (IEEPA), the decision in Learning Resources does not limit other statutory authorities, leaving certain existing tariffs in place and allowing the Administration to impose new tariffs under such authorities. Even before the decision, the Administration was considering tariffs on imported pharmaceutical products and ingredients and certain medical devices under Section 232 of the Trade Expansion Act of 1968.
Since the decision, the Trump Administration imposed a temporary 10% worldwide tariff under Section 122 of the Trade Act of 1974 (subject to certain exceptions for pharma products and products that face Section 232 tariffs in the future), and the US Trade Representative has initiated sweeping new tariff investigation processes under Section 301 of the Trade Act and promised additional tariffs to address discriminatory trade practices including “pharmaceutical pricing.”
Ultimately, the full impact of the Court’s decision remains to be seen.
New Agreements Increase Complexity
Adding to this atmosphere, life sciences companies must also navigate new international trade deals and manufacturer-specific bargains.
Over the past year, the Trump Administration has announced new framework trade agreements, including the US-India agreement struck in February 2026, many of which focus on relief from now-defunct IEEPA-based tariffs. For many countries, the Supreme Court’s decision in Learning Resources means that the scope and validity of similar deals – including the recent US-UK and US-EU agreements, which provide tariff relief for certain pharmaceutical products – are open questions.
At the same time, Pfizer, Eli Lilly, and Merck's US business, among others, have struck agreements with the White House, trading commitments on domestic drug pricing and US-based manufacturing for relief from certain tariffs and, in some circumstances, expedited drug application review by the Food and Drug Administration through the Administration’s new National Priority Review Voucher pilot program. These deals sit at the intersection of the Administration's trade, manufacturing, and consumer pricing agendas — and they introduce political risk alongside commercial complexity.
Key Takeaways
For life sciences companies, these developments present several strategic considerations:
- Global trade rules are more interconnected than ever. Tariffs, bilateral trade agreements, and bespoke manufacturer arrangements form a web in which pulling one thread shifts the tension across the whole structure. Geography and jurisdiction are not, on their own, reliable proxies for risk level.
- Companies should consider risk tradeoffs when investing in manufacturing facilities and arranging cross-border supply chains. On the one hand, investing in US facilities may lessen tariff exposure in the short term, but companies may face higher costs and political uncertainty. On the other hand, investing in foreign jurisdictions like India and China may exchange lower manufacturing for higher tariff rates and volatility when it comes to relevant US policies.
- Companies should also carefully review and consider contractual obligations that may be impacted by both tariffs and the Administration’s drug pricing initiatives, particularly recent trade agreements and the threat of so-called “most favored nation” legislation.
