Business
Europe’s Pharma Industry Braces for Pain as Trump Tariff Threat Looms
Insulin, heart treatments and antibiotics have flowed freely across many borders for decades, exempt from tariffs in a bid to make medicine affordable. But that could soon change.
For months, President Trump has been promising to impose higher tariffs on pharmaceuticals as part of his plan to reorder the global trading system and bring key manufacturing industries back to the United States. This month, he said pharmaceutical tariffs could come in the “not too distant future.”
If they do, the move would have serious — and wildly uncertain — consequences for drugs made in the European Union.
Pharmaceutical products and chemicals are the bloc’s No. 1 export to America. Among them are the weight-loss blockbuster Ozempic, cancer treatments, cardiovascular drugs and flu vaccines. Most are name-brand drugs that yield a large profit in the American market, with its high prices and vast numbers of consumers.
“These are critical things that keep people alive,” said Léa Auffret, who heads international affairs for BEUC, the European Consumer Organization. “Putting them in the middle of a trade war is highly concerning.”
European companies could react to Mr. Trump’s tariffs in a range of ways. Some pharmaceutical companies trying to dodge the tariffs have already announced plans to increase production in the United States, which Mr. Trump wants. Others could decide to move production there later.
Other companies appear to be staying put, but could raise their prices to cover the tariffs, pushing up costs for patients. And higher prices could affect not only American consumers, but also patients in Europe. Some companies have begun to argue that Europe should create more favorable conditions for their businesses by dismantling some of the rules that keep drug prices down.
Or some middle ground could play out: Companies might shift their financial profits to the United States for accounting purposes to avoid import charges, even as they leave their physical factories overseas to avoid the expenses of moving and challenges of having to set up new supply chains.
Ms. Auffret’s group has already warned European officials that they must not hit back at an attack on the important industry by tariffing American drugs in return: Tit for tat would come at too serious of a cost to European consumers.
But the pharmaceutical sector is complicated. Agreements with insurance companies and government agencies can make it difficult to rapidly adjust prices for branded drugs, while government regulations can make moving both a challenge and a long-term commitment. The upshot is that no one can confidently predict the outcome.
“We haven’t tariffed pharmaceuticals in a very long time,” said Brad W. Setser, an economist at the Council on Foreign Relations who has closely studied the tax rules that incentivize overseas production.
Even as Mr. Trump has paused his so-called “reciprocal” tariffs in favor of an across-the-board rate of 10 percent during the hiatus, he has left in place some industry-specific tariffs and made clear that computer chips and pharmaceutical products would be next. The United States recently kicked off investigations into both sectors, a first step toward hitting them with tariffs.
Many industry experts expect that the new tariffs could be 25 percent, in line with those on steel, aluminum and cars.
For the countries at the center of Europe’s drug industry, the possible tariffs are particularly worrisome. That is especially true for Ireland, where pharmaceuticals make up 80 percent of all exports to the United States.
Many drug companies originally moved to Ireland because it offers very low corporate tax rates. But it has also worked to develop its pharmaceutical industry and offers access to a highly skilled work force.
In recent years, the sector has grown rapidly. More than 90 pharmaceutical companies are now based there, according to Ireland’s Foreign Direct Investment Agency, and many of the biggest American drugmakers have operations in the nation. Last year, Ireland’s pharma industry exported 58 billion euros, or about $66 billion, in pharmaceutical and chemical products to the United States.
“The Irish are smart, yes, smart people,” Mr. Trump said in March, while Prime Minister Micheál Martin of Ireland was visiting the White House. “You took our pharmaceutical companies and other companies,” he said. “This beautiful island of five million people has got the entire U.S. pharmaceutical industry in its grasps.”
Now, tariffs could chip away at the benefits of manufacturing there — which is Mr. Trump’s goal.
“In the U.S., we don’t make our own drugs anymore,” Mr. Trump said last week from the Oval Office, adding that “the drug companies are in Ireland.”
Firms are already bracing. Companies have been rushing to export their pharmaceuticals from Ireland and into the U.S. market before the gauntlet falls, statistics suggest.
Nor is Ireland the only country affected. Germany, Belgium, Denmark and Slovenia are also major exporters.
“It’s an enormous issue for Europe,” said Penny Naas, who leads a competitiveness program for the think tank the German Marshall Fund and has long worked in European public policy and corporate affairs.
European leaders have been reaching out to both American officials and the industry. In addition to the Irish prime minister’s recent visit to the Oval Office, the Irish foreign affairs minister traveled to Washington to meet with the commerce secretary.
Ursula Von der Leyen, the president of the European Commission, the European Union’s executive arm, has met in Brussels with the European Federation of Pharmaceutical Industries and Associations, the lobby group representing Europe’s biggest drugmakers.
The industry is leveraging the moment to push for wish-list items, like less red tape.
The European drug lobby group told Ms. von der Leyen that companies could shift production or investment toward the United States to limit their exposure to Mr. Trump’s tariffs, especially when faster approvals and easier access to capital are making America more attractive.
At least 18 members of the group, which includes Bayer, Pfizer and Merck, have planned nearly €165 billion in investments in the European Union over the next five years. As much as half of that could shift to the United States, the federation said. Nor is it alone in that prediction.
“Pharma needs more attractive conditions to produce in Europe,” said Dorothee Brakmann, the director of Pharma Deutschland, Germany’s largest association of pharmaceutical companies.
Such warnings seem to have teeth. Some companies have begun to lay out plans to spend more in the United States; the firm Roche last week announced a $50 billion American investment plan, the latest in a string of such announcements.
In commentary published last week, the chief executives of Novartis and Sanofi suggested that less regulation was not enough to stem the bleeding. They argued that “European price controls and austerity measures reduce the attractiveness of its markets,” and that the bloc should pave the way for higher prices.
Industry executives have also warned that tariffs on the sector could disrupt supply lines, impair patient access and dampen research and development.
“There’s a reason” that tariffs on medicines are set to zero, Joaquin Duato, the chief executive of the drugmaker Johnson & Johnson, said on a recent earnings call. “It’s because tariffs can create disruptions in the supply chain, leading to shortages.”
Ms. von der Leyen has emphasized similar concerns, warning that tariffs on the pharmaceutical sector risk “implications for globally interconnected supply chains and availability of medicines for European and U.S. patients alike.”
Pharmaceutical tariffs also hold another danger for the European Union.
The bloc has been trying to build up its ability to manufacture generic drugs, which are medically essential but much less profitable than the name-brand products, and are frequently made in Asia.
But if U.S. tariffs mean that generic drug manufacturers in China and India are suddenly looking for customers outside of America, it could send a flood of cheaper-than-usual pills toward Europe.
That could make it even more difficult for the European Union to establish a domestic manufacturing base for generics, even as tariffs lure name-brand drug production toward the United States.
“We do think that it’s likely that this is going to cause increased investment in the U.S.,” said Diederik Stadig, a sectoral economist at ING. “The European Commission needs to be on the ball.”
Two Amazon delivery service partners are shutting offices and laying off hundreds.
Xpress Delivery, located in Oakland, will be laying off 80 employees. OnPoint Logistics will be ceasing operations at its San Francisco location and cutting 96 jobs, according to a government filing.
Amazon delivery service partners are independent businesses that partner with Amazon to deliver packages from a local fulfillment center to the delivery station using Amazon delivery vans and provided devices.
In January, Amazon announced it would cut 16,000 jobs from its workforce and announced additional layoffs in May in its selling partner services team.
These are only joining a growing list of layoffs across California’s tech and business hubs. LinkedIn, Cisco, Meta, and Oracle have all announced layoffs this year. Both LinkedIn and Cisco cut around 5% of their workforce overall, with hundreds of those layoffs occurring in California. Meta and Oracle slashed over 10% of their workforces in favor of implementing AI into its operations.
Both OnPoint and Xpress delivery stations will permanently cease operations, and no replacement companies have been announced yet to operate there.
Amazon did not respond to a request for comment.
Netflix has long been seen as the winner in the streaming wars, with more than 325 million subscribers globally and hits like “Stranger Things” and “KPop Demon Hunters.”
For months, Netflix had been telling investors how it planned to scale its business to new heights by acquiring Warner Bros. Discovery, a potentially transformative media deal.
But after the streaming giant passed on buying the media company in February, Netflix has faced persistent questions from investors about its plans for staying on top.
Reflecting the investor unease, Netflix’s stock price, which closed Tuesday at $73.68 a share, has declined 21% this year and is down 42% from a year ago.
“Obviously, they have a very successful business,” said Ross Benes, a senior analyst at research firm eMarketer, adding that most of Netflix’s revenue comes from its subscriptions. “Your investors always want to just see more and more and more, and they mostly provide that one thing.”
Part of the reason investors are anxious is that Netflix’s share of TV viewing time in the U.S. has steadily declined in recent months as rival YouTube has gained market share, according to Nielsen data.
Netflix represented 7.8% of all TV viewing in the U.S. in April — the lowest percentage since May 2025. It was 7.5% in April 2025, Nielsen said.
By comparison, YouTube has seen its share of the streaming audience go up. YouTube’s TV viewing share in April rose to 13.4%, up from 12.4% a year earlier, Nielsen said.
Some investors fear that if viewership is down, subscribers could cancel the service, which would negatively affect the platform’s growing advertising business. It could also undercut Netflix’s ability to raise prices in countries like the U.S.
Despite the investor jitters, equity analysts estimate Netflix will have a strong second quarter, with revenue increasing 14% to $12.58 billion and net income rising 8% to nearly $3.38 billion, according to FactSet. One reason is continued growth in its advertising business and the popularity of new programming such as crime series “I Will Find You.”
Netflix will release its second quarter earnings results on Thursday. The company declined to comment for this story.
Netflix has noted that it has a low churn rate compared to competitors. The company said it has a long runway for growth, penetrating only about 5% of global TV viewing, according to a letter to shareholders in April. A number of its shows and movies appear on Nielsen’s most-watched streaming lists.
Among the company’s key priorities are broadening its entertainment offerings in areas such as live programming, games and video podcasts as well as growing its advertising business.
“A measure of our performance is engagement, which is not just the quantity of hours watched, but also the quality of that experience for our audiences,” Netflix said in its April letter, adding that its primary internal quality metric reached an all-time high in the first quarter.
“We believe we have meaningful advantages as we strive to become a must‑have service for consumers: a strong global brand, a wide range of high‑quality programming, a best‑in‑class product experience, and a frequent role at the center of culture,” Netflix said in its April letter.
Several equity analysts believe the Los Gatos-based company is still growing and remain bullish on the stock.
The last time Netflix came under major scrutiny from investors was in 2022, when it reported subscriber declines in the first quarter of that year. That pushed Netflix into pursuing other initiatives including selling cheaper subscriptions with ads, cracking down on password sharing and offering games on its service.
Last year, Netflix said it generated more than $1.5 billion in advertising and expects to roughly double that to $3 billion this year.
“We believe this is a long-term growth company,” said Jessica Reif Ehrlich, senior media and entertainment analyst at BofA Securities, who has a buy rating on the stock.
As part of its diversification, Netflix has expanded its portfolio of live programming over the years, including adding NFL games and streaming Major League Baseball’s opening day game.
But some analysts say Netflix needs to have a larger share of live sports content to draw sports fans into subscribing.
“They’re getting a lot of casual sports fans, but avid sports fans don’t need Netflix at all really, not yet,” Benes said.
Additionally, Netflix is adding new content to its platform by partnering with YouTube creators, adding video podcasts such as “The Breakfast Club” and partnering with media companies like BuzzFeed Studio to bring videos as short as three minutes to its service, which could help with viewer engagement.
“They help existing subscribers use the service more,” Benes said. “Let’s say I get in the habit of watching all these video podcasts on Netflix. It might not be the reason why I pay for it, but I might say, ‘Oh, I don’t know if I want to cancel it.’”
Some analysts think Netflix should consider other acquisitions to fuel future growth after walking away from Warner Bros. Discovery, which was scooped up by Paramount.
Comcast earlier this year announced that it plans to spin off NBCUniversal, which has properties including “Minions” and “Jurassic Park.” Some analysts speculated that Netflix could be interested in buying it.
“From our point of view, it makes a ton of sense,” Reif Ehrlich said. “Universal also has a great film and TV library. Maybe not as deep as Warner Bros., but very strong.”
Netflix executives also are considering launching live channels, including ones that are based on genres, and bundling with other streaming services, according to a person familiar with the matter who was not authorized to speak publicly. The Wall Street Journal was the first to report on the internal discussions.
Netflix launched TF1 live channels this year on its service in France in a partnership with media company TF1 Group. TF1 said its audience targets that were set for the 18-month horizon were achieved in less than three weeks.
When it comes to Netflix’s next move, anything is possible.
“Years ago, they said they wouldn’t get into advertising. They wouldn’t get into sports. They wouldn’t have theatrical releases,” Reif Ehrlich said, naming efforts that Netflix initially was adverse to doing before changing course . “So the business will continue to evolve and change.”
In a case that has become a local flashpoint, environmental groups seeking to halt a lithium operation in Imperial County until it gets further review argued before a state appeals court in San Diego on Thursday.
Controlled Thermal Resources wants to extract lithium from hot brine that will be used to power a geothermal electricity plant it plans to build. This type of lithium removal is different from traditional hardrock mining or evaporation ponds. The project also would need 6,500 acre-feet of fresh water annually for washing the mineral and cooling.
Earthworks, a nonprofit focused on the impacts of mining, and Comité Cívico del Valle, an Imperial County environmental justice group, allege the county didn’t adequately examine the project’s effects on water supply, air quality and tribal cultural resources when it granted approvals.
The groups filed suit in March 2024 and Imperial County Superior Court Judge Jeffrey Jones ruled against them in January 2025, saying the county met its legal requirements.
Before a panel of three judges for the California Court of Appeals 4th Appellate District, plaintiffs’ lawyer Doug Carstens argued that if water becomes scarcer, the project may rely on agricultural runoff that currently feeds the shrinking Salton Sea, exacerbating dust and air quality issues. He also said the environmental review did not account for future water-thirsty projects in the desert area.
“There will be a lot of straws dipping into the pool,” Carstens said.
The project, called Hell’s Kitchen, also failed to adequately involve local tribes in assessing the effect on cultural resources, he said.
Controlled Thermal Resources attorney Suzanne Varco said that the company reached out to 26 area tribes in 2021 and received no reply. She noted that one elder from Kwaaymii Laguna Band of Indians responded with concerns about mud pots and other resources in the area, but it was more than five months after the consultation period closed.
Justice Julia Kelety’s questions suggested the tribes provided names for resources in the area but failed to say how they would be affected.
Justice Truc Do said it was hard to assess fully how the project will affect the region’s water because the environmental review was unclear whether it will last 30 or 50 years. The region primarily relies on water from the overtapped and shrinking Colorado River.
The case is important because Imperial County has pegged its future to lithium, a mineral critical for electric car batteries. Two other companies are trying to reach commercial extraction near the Salton Sea. Gov. Gavin Newsom called Imperial Valley “the Saudi Arabia of lithium” in 2022, and has touted the industry’s potential to bring jobs and community benefits to one of the poorest counties in the state.
Multiple setbacks and deadline extensions later, lithium has yet to materialize even as industry job training programs graduate students into careers that have not arrived in the area. The county has blamed the lawsuit for the slow start. The boom and bust nature of mining as well as shifting federal policies have also played a role.
The court could decide within a few weeks to several months.
Earthworks and Comité Cívico del Valle have repeatedly said they don’t outright oppose lithium development in the area, but want CTR to acknowledge and minimize potential harm.
“We are not trying to stop the Hell’s Kitchen Project, we think it should be fixed, with enforceable protections for the environment, tribal cultural resources, and the health of frontline communities,” said Jared Naimark, senior manager at Earthworks.
Imperial County and CTR declined to comment on pending litigation, but Controlled Thermal Resources spokesperson Lauren Rose articulated a commitment to advancing geothermal and lithium development “as core components of our Hell’s Kitchen Project.” The company recently announced a plan to power local data centers which led some to worry about the company’s commitment to lithium.
Earlier this year the company delayed its plans for lithium production to 2028. Rose said the project is still progressing toward initial construction and will announce timing “as key development, financing, and construction milestones are achieved.”
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