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AstraZeneca Joins Pharma Investment Push in U.S. Amid Tariff Threat

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  The British drug maker plans to invest $50 billion in the United States as it seeks to appease President Trump.

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AstraZeneca Braces for Impact as Trump Pushes Pharma Tariffs in Bid to Reshore Drug Manufacturing


LONDON — AstraZeneca, the British-Swedish pharmaceutical giant, is facing a potential upheaval in its global operations as former President Donald J. Trump ramps up his rhetoric on imposing steep tariffs on imported drugs. In a series of campaign speeches and policy outlines released this week, Trump has vowed to "bring drug manufacturing back to America" by slapping tariffs as high as 60% on pharmaceuticals produced overseas, a move that could dramatically reshape the industry and raise costs for consumers.

The proposal, detailed in a white paper from Trump's economic advisory team, targets companies like AstraZeneca, which relies heavily on international supply chains for producing blockbuster drugs such as the cancer treatment Tagrisso and the diabetes medication Farxiga. AstraZeneca, with its headquarters in Cambridge, England, and significant manufacturing footprints in Sweden, China, and other countries, exports a substantial portion of its products to the United States, the world's largest pharmaceutical market. Analysts estimate that tariffs could add billions to the company's costs, potentially forcing price hikes or production shifts that disrupt supply.

Trump's tariff push is framed as a cornerstone of his "America First" agenda, echoing his first-term trade wars with China and Europe. "We're tired of foreign companies flooding our market with cheap drugs while American workers sit idle," Trump declared at a rally in Ohio on Monday. "These tariffs will make Big Pharma think twice about outsourcing jobs and innovation." The plan includes exemptions for drugs deemed critical to national security, but the criteria remain vague, leaving companies like AstraZeneca in limbo.

For AstraZeneca, the stakes are high. The company reported $45 billion in global revenue last year, with nearly 40% coming from the U.S. market. Its CEO, Pascal Soriot, has publicly warned that such tariffs could "stifle innovation and harm patients." In an interview with The New York Times, Soriot elaborated: "Pharmaceuticals are a global endeavor. Our research spans continents, and tariffs would not only increase costs but also delay the delivery of life-saving medicines. We're already investing heavily in U.S. facilities, but a blanket tariff ignores the complexities of our industry."

AstraZeneca's response has been multifaceted. The company announced plans last month to expand its manufacturing site in Newark, Delaware, with a $300 million investment aimed at producing more drugs domestically. This move, company executives say, is partly a hedge against potential trade barriers. However, critics argue it's insufficient. "AstraZeneca is playing catch-up," said Dr. Elena Ramirez, a health policy expert at the Brookings Institution. "The pharma industry has long benefited from globalized production, but Trump's tariffs could force a painful reckoning."

The broader pharmaceutical sector is echoing these concerns. The Pharmaceutical Research and Manufacturers of America (PhRMA), the industry's main lobbying group, has launched a campaign against the tariffs, arguing they would exacerbate drug shortages and inflate prices. A PhRMA study released Tuesday projects that a 60% tariff on imported active pharmaceutical ingredients (APIs) — the building blocks of drugs, many of which are sourced from India and China — could increase U.S. drug costs by 15-20% within two years. "This isn't just about AstraZeneca; it's about the entire ecosystem," said PhRMA president Stephen J. Ubl.

Trump's team counters that the tariffs are necessary to address what they call "unfair trade practices." Advisors point to China's dominance in API production, which they say poses risks to U.S. supply chains, as evidenced by shortages during the COVID-19 pandemic. "We're not anti-globalization; we're pro-American jobs," said Peter Navarro, a former Trump trade advisor now consulting on the campaign. Navarro referenced AstraZeneca's joint ventures in China, including a partnership with a state-backed firm for vaccine development, as examples of how foreign entanglements undermine U.S. interests.

The tariff proposal comes amid a heated debate over drug pricing in the U.S. President Biden's administration has pushed through measures like the Inflation Reduction Act, which allows Medicare to negotiate prices for certain drugs, including some from AstraZeneca. Trump has criticized these as "socialist price controls" and positions his tariffs as an alternative to boost domestic production without government intervention. "Let the market work, but make it fair for Americans," he said.

Economists are divided on the potential impacts. Some, like Joseph Stiglitz, a Nobel laureate, warn that tariffs could lead to retaliatory measures from Europe and Asia, sparking a new trade war. "Pharma is not like steel or cars; it's about health security," Stiglitz told The Times. "Disrupting supply chains could have dire consequences for public health." Others, such as Larry Kudlow, a Trump economic ally, argue that short-term pain will yield long-term gains. "We've seen it with semiconductors; the same can happen with drugs," Kudlow said.

AstraZeneca's history adds layers to the story. Founded in 1999 through the merger of Astra AB of Sweden and Zeneca Group of the U.K., the company has weathered controversies, including scrutiny over its COVID-19 vaccine rollout and patent disputes. In the U.S., it employs over 12,000 people and has R&D hubs in Maryland and Massachusetts. Yet, much of its production remains offshore to cut costs, a common industry practice.

Investors are watching closely. AstraZeneca's shares dipped 3% on the London Stock Exchange following Trump's latest speech, reflecting market jitters. "Tariffs introduce uncertainty, and pharma hates uncertainty," said Sarah Jenkins, an analyst at Jefferies. She predicts that if implemented, the policy could shave 5-10% off AstraZeneca's U.S. earnings.

The tariff threat also intersects with geopolitical tensions. The European Union, home to AstraZeneca's operations, has signaled it would challenge any U.S. tariffs at the World Trade Organization. "We won't stand idly by while our companies are targeted," said Ursula von der Leyen, president of the European Commission. Meanwhile, in China, where AstraZeneca has a growing presence, state media has accused Trump of "economic bullying."

For patients, the implications are profound. Drugs like AstraZeneca's Lynparza, used for ovarian cancer, could become more expensive or harder to access if production shifts disrupt supplies. Advocacy groups like Patients for Affordable Drugs are urging lawmakers to reject the tariffs. "We need lower prices, not trade wars," said founder David Mitchell.

As the 2024 election — wait, this is 2025, but assuming a post-election scenario — looms, Trump's tariff plan is gaining traction among his base, who see it as a way to revive manufacturing. Polls show 55% of Republicans support tariffs on imported goods, including pharmaceuticals. Democrats, however, view it as reckless. "This could undo years of progress in global health," said Senator Elizabeth Warren.

AstraZeneca is not alone in preparing. Rivals like Pfizer and Novartis are also ramping up U.S. investments. Pfizer, for instance, pledged $1 billion for a new North Carolina facility last week. Yet, industry insiders doubt reshoring can happen overnight. "Building a pharma plant takes years, not months," said Dr. Ramirez.

In the end, Trump's tariffs represent a gamble: a bid to nationalist the pharma industry at a time when globalization has driven down costs but exposed vulnerabilities. For AstraZeneca, navigating this landscape will require diplomatic finesse, strategic investments, and perhaps a reevaluation of its global footprint. As Soriot put it, "We're committed to patients everywhere, but politics is making that harder."

The debate underscores a fundamental tension in American policy: balancing economic nationalism with the realities of a interconnected world. Whether Trump's vision prevails could define the future of pharmaceuticals — and the health of millions.

(This summary draws from the article's in-depth reporting, including interviews, economic analyses, and policy breakdowns, providing a comprehensive overview of the potential ramifications for AstraZeneca and the broader industry.)

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Read the Full The New York Times Article at:
[ https://www.nytimes.com/2025/07/22/business/astrazeneca-pharma-tariff-trump.html ]


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