The ongoing upheavals to international trade and the many executive orders issuing from the White House continue to create headaches for those in industry trying to do forward planning.
The initial announcement of swingeing tariffs on imports originating anywhere outside the US threw global industries like automotive, electronics and pharmaceuticals into crisis mode. The situation was then confused further by the various rollbacks that have since occurred. Even China, which President Trump said was his key target, has seen initial tariff levels reduced considerably and has responded in kind. Even as C&I went to press the outlook remains deeply uncertain about what tariffs will be applied and when.
What’s clear, however, is that one key aim of the White House is to encourage the re-shoring of manufacturing operations that, because of the drive for globalisation, have moved to the lowest cost producers mainly located in Asia. The imposition of tariffs was designed to force producers of cars and electronics, for example, to return their operations to the US.
And, although pharmaceuticals were exempt from the announced tariffs, there was a threat pharma would be included ‘within the next few months’. The main targets for possible pharmaceutical tariffs are Europe, China and India, the latter of which, have become major sources of active pharmaceutical ingredients for the global pharmaceutical industry.
This threatened approach has proved successful with a host of mainly US, but also some European, pharma majors who have announced plans for large investments in US manufacturing sites.
Another executive order aims to achieve a cut in the price of drugs in the US by up to 90%. This price reduction is to be achieved through a ‘most favoured nation’ policy and instructs the Department of Health & Human Services (HHS) to tie the price the government pays for drugs to the lowest prices paid by other developed countries. Pharma companies have been given 180 days to negotiate prices with the HHS, after which target prices will be established. Most observers expect this to generate a slew of legal challenges as executive orders cannot override federal law.
President Trump has followed up these initiatives in the recently signed UK-US trade deal, but also with yet another executive order: Improving the Safety and Security of Biological Research, which is designed to ‘end federal funding of dangerous gain-of-function research’ in ‘countries of concern’, specifically China, as well as other countries that are not considered to have sufficient US oversight. Among the countries ‘of concern’, included in an earlier measure blocking access to US research data, were Hong Kong, Macau, Russia, Iran, North Korea, Cuba and Venezuela. Some observers have suggested that not only will this affect these countries but also have an impact on research conducted within the US.
Life science research in the US is already under pressure from the funding cuts and employment terminations introduced as part of the large-scale reorganisation of federal departments, initiated by the Department of Government Efficiency (DOGE) (C&I, 2025, 89, 3, 5).
This reorganisation has been subject to a restraining order supported by a group of labour unions, nonprofit organisations and local governments. In early May 2025, a two-week order was secured, with the presiding judge noting: ‘The President has the authority to seek changes to executive branch agencies but must do so in lawful ways and, in the case of large-scale reorganisations, with the cooperation of the legislative branch’, the US Congress.
These uncertainties for US researchers have encouraged many who believe their funding will be cut off, to look elsewhere for that funding security, with Europe being a potential location. The impact of decisions by individual researchers should not be underestimated: scientists have long careers and where they base themselves can have profound impacts on where new science emerges.
For business, global supply chains have evolved over decades (and much longer) based on where materials and skills can be found at the right cost. Even if those calculations are changed overnight by changes in government policies, it doesn’t mean that supply chains can respond at the same pace.
Few businesses enjoy uncertainty. But once businesses do start looking at their strategies with a fresh eye, this could create new opportunities.
If companies are rethinking where they base their manufacturing or R&D efforts, then governments would be wise to offer an attractive environment for that work to be done. As we report this month, SCI’s specially commissioned research suggests that the UK could create a £10bn boost to the economy by enabling better access to sovereign health care assets for pharma companies. Moves like that could help tip the balance for some companies looking to locate themselves in a changing world.
The changes to world trade and science policy are still emerging, but the consequences could last for decades.
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