Trump Threatens "250% Tariff on Pharmaceuticals"... Swiss Big Two to Produce Locally in U.S.
by Kim Seungwook
Published 11 Aug.2025 09:12(KST)
Updated 11 Aug.2025 15:52(KST)
Trump Imposes 39% Reciprocal Tariff on Switzerland
Pressures to Raise Pharmaceutical Tariffs to 250%
Roche and Novartis to Localize U.S. Sales Production
As U.S. President Donald Trump imposes high tariffs on Swiss imports, Swiss pharmaceutical companies are moving to increase local production in the United States. Citing the Swiss daily Neue Z?rcher Zeitung (NZZ) on the 10th (local time), Yonhap News reported that "Switzerland's two major pharmaceutical companies, Roche and Novartis, plan to produce 100% of their U.S. sales volume locally in order to avoid President Trump's high tariffs."
Roche will significantly increase its U.S. production to fully meet local demand, with any surplus to be exported to other countries. Novartis also plans to produce 100% of its key products in the U.S. going forward. However, both companies intend to keep their research and development, as well as marketing staff, in Switzerland. Both Roche and Novartis already have subsidiaries and production facilities in the U.S. Previously, as President Trump's tariff threats became more pronounced, Roche pledged to invest $50 billion (70 trillion won) and Novartis $23 billion (32 trillion won) in the U.S.
Since the 7th, the U.S. has imposed a 39% reciprocal tariff on Swiss imports. Medical devices such as diagnostic tools are included in these reciprocal tariffs. Pharmaceuticals are currently exempt from these reciprocal tariffs. However, President Trump has threatened to soon impose product-specific tariffs on pharmaceuticals, raising them to 150% after one year and 250% thereafter. He has also demanded that global pharmaceutical companies lower the prices of drugs sold in the U.S. to the "lowest price paid by any other advanced country."
As a result, the Swiss pharmaceutical industry has been hit hard. Pharmaceutical production and research and development are key industries, accounting for about 10% of Switzerland's gross domestic product (GDP). In 2023, pharmaceuticals, vitamins, and diagnostic tools made up 57% of Switzerland's exports to the U.S.
Due to the burden of U.S. tariffs, other exporters are also considering relocating to the U.S. Ypsomed, a manufacturer of medical syringes, and Thermoplan, which supplies coffee machines to Starbucks, are reviewing plans to move or expand their production facilities to the U.S. Pilatus, an aircraft manufacturer, has announced that it will suspend exports to the U.S. for now and build an additional factory locally.
Swiss President Karin KellerSutter (right) and Economy Minister Guy Parmelin. Photo by AFP Yonhap News
원본보기 아이콘Pressure is mounting on the Swiss economy. Earlier, Bloomberg predicted that the high tariffs could reduce Switzerland's GDP by up to 1%. Economy Minister Guy Parmelin and Health Minister Elisabeth Baume-Schneider are reportedly planning to hold an emergency meeting with the management of Roche and Novartis soon to discuss crisis response measures.
On July 31, President Trump announced a 39% reciprocal tariff on Swiss watches, pharmaceuticals, machinery, and other goods. This is actually an 8 percentage point increase from the 31% first announced in April. Foreign media interpreted President Trump's anger as a response to Switzerland's perceived lack of sincerity in addressing the U.S. trade deficit. There is also speculation that, since Switzerland's trade surplus with the U.S. last year was $38.5 billion (about 54 trillion won), the tariff was set at 1% for every $1 billion.
According to members of the Swiss Federal Assembly, on August 8, U.S. House Representatives from both the Republican and Democratic parties who visited Geneva were asked to explain the 39% reciprocal tariff, but reportedly provided no answers.
Fabian Molina of the Social Democratic Party (SP) told public broadcaster SRF, "No one could explain why we have come under such scrutiny or what will happen next." Lawmaker Damien Cottier said, "Republican lawmakers agreed in principle with the tariff increase, but even they said they could not understand why Switzerland faces a much higher tariff rate than other European countries."
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