A pledge of “preferential treatment” for the UK’s pharmaceutical industry, made by Donald Trump in May, now appears worthless as his administration threatens to impose a crushing 100% tariff on branded drugs. This dramatic reversal has left the sector, and the British government, scrambling for answers and has highlighted the fragility of verbal assurances in international trade.
The proposed tariffs, which also include 25% on trucks and 50% on cabinets, are a stark reminder of the UK’s exposure after being excluded from a tariff deal Keir Starmer brokered with the US five months ago. That agreement covered cars and steel but left the vital pharmaceutical industry out in the cold. Now, the consequences of that omission are becoming painfully clear as the October 1st deadline looms.
A UK government spokesperson has tried to calm nerves, stating, “We know this will be concerning for industry, which is why we’ve been actively engaging with the US.” The government is now under pressure to secure a last-minute exemption, a task made more awkward by the fact that the threats follow a high-profile state visit designed to smooth over transatlantic relations.
However, the narrative of a blanket tariff may be misleading. Market analyst Lale Akoner has suggested that the policy is targeted, designed to penalize companies that don’t manufacture in the US. “Investors see more bark than bite,” she noted, pointing out that global giants like AstraZeneca and Roche are likely safe due to their US-based operations. This would mean the tariff is less a trade weapon and more a coercive tool to drive investment into America.
This nuanced view provides little comfort to the broader European market. The German auto industry has reacted angrily to the 25% truck tariff, calling it illogical and harmful to global supply chains. The move has already affected stock prices and raised concerns about the stability of the entire transatlantic trade relationship, with fears that medical devices could be the next target in the ongoing dispute.