[Reporter's View] US tariffs…variable that must be faced

Tension is growing in the domestic pharmaceutical and biotech industry as President Donald Trump recently announced the potential imposition of tariffs on imported pharmaceuticals.

 

If the tariff hike is imposed, it is expected to directly impact not only the procurement costs of raw materials and sub-materials for Korean companies but also their price competitiveness when exporting finished products.

 

According to the announcement, the tariffs are projected to be imposed approximately 1 to 1.5 years from now.

 

While opinions within the industry are divided on the realistic feasibility of applying tariffs as high as 200%, the burden companies would face, even if tariffs are partially imposed, would be substantial.

 

In particular, the U.S.

 

market is crucial for Korean pharmaceutical and biotech companies as an export destination.

 

For domestic companies that have rapidly grown in areas such as biosimilars and active pharmaceutical ingredients (APIs), securing global competitiveness, tariff barriers pose a significant threat.

 

If a deterioration in profitability and a decline in price competitiveness materialize, significant disruptions to companies' global strategies are inevitable.

 

Furthermore, Korean companies that have relied on the Contract Manufacturing Organization (CMO) and Contract Development and Manufacturing Organization (CDMO) industries as key growth pillars could face direct pressure, such as demands to relocate production sites or re-evaluate contract structures.

 

Although specific implementation plans have not yet been released, long-term and strategic responses are required.

 

Thus, there is a growing need to establish various tariff imposition scenarios and prepare stepwise countermeasures starting now.

 

This tariff issue is likely to affect not only the pharmaceutical and biotech industries but also industries across the board, including automobiles, electronics, and steel.

 

Therefore, individual corporate responses alone have apparent limitations.

 

Ultimately, the government and businesses must collaborate to develop various scenarios based on potential tariff increases and formulate corresponding phased countermeasures.

 

At the government level, while diplomatic efforts are necessary to reduce the likelihood of tariff increases, it is also essential to implement policy support measures, such as financial assistance and tax benefits, to minimize the impact on companies.

 

Especially given that the government has identified the pharmaceutical and biotech sector as one of the future growth engines, neglecting this anticipated threat or delaying a response would be a strategic misstep.

 

The pharmaceutical and biotech industries, by their nature, require long-term preparation and investment.

 

The pharmaceutical and biotech industries, which are highly susceptible to the negative effects of trade conflicts, demand even more concrete and proactive preparation.

 

It is crucial to recognize that this President Trump-initiated tariff issue is not merely a political discussion but a significant variable that will determine the overall competitiveness and survival of the industry.

 

Therefore, discussions on a pan-governmental response must be initiated fully.

 

The pharmaceutical and biotech industries should use this tariff issue as an opportunity to comprehensively re-evaluate the structural risks associated with global market entry and formulate new strategies.

 

The government must actively consider and implement consultative bodies in collaboration with the private sector to prepare for tariff increases and long-term competitiveness strategies.