Pharma industry escapes Trump tariffs, but still in crosshairs

The news: The pharma industry dodged the Trump administration's tariffs, but it may only be a temporary reprieve.

Pharma was exempted from both country-specific and the broad 10% tariffs on all goods. However, the administration is considering a section 232 pharma investigation which could result in industry-specific tariffs under the Trade Expansion Act, per Bloomberg. Pharma companies’ foreign tax breaks are also in Trump’s crosshairs, the WSJ reported.

The backdrop: US pharma companies Pfizer, AbbVie, Johnson & Johnson, and Merck are among those that report taxable income from foreign subsidiaries in countries like Ireland and Switzerland, avoiding US tax bills. Trump has previously called out pharma companies’ tax shelters, and US Commerce Secretary Howard Lutnick recently singled out Ireland in his goal to remove “tax scams,” per WSJ.