US pharma tariffs threaten future investments in S'pore

Trump's move could see companies re-shore manufacturing capacity in the US: Analysts

- Ovais Subhani Senior Business Correspondent and Annabelle Liang Correspondent

US President Donald Trump on Sept 25 announced sweeping new tariffs, including 100 per cent duties on branded drugs imported into the US with effect from Oct 1.

He also said he would start charging a 50 per cent tariff on imported kitchen cabinets and bathroom vanities, following through on a pledge to bring back America's furniture business.

Asian stocks fell on Sept 26, with pharmaceutical companies leading the decline.

However, analysts suggest that the latest pharma tariffs are unlikely to have a significant impact on Singapore's pharmaceutical exports in the immediate term, as most of the top exporters here have already committed to building new US facilities, which will qualify them for exemption from the levy.

In a Truth Social post on Sept 25, President Trump said: “Starting Oct 1st, 2025, we will be imposing a 100 per cent tariff on any branded or patented pharmaceutical product, unless a company is building their pharmaceutical manufacturing plant in America.”

“There will, therefore, be no tariff on these pharmaceutical products if construction has started,” he added.

Maybank economist Chua Hak Bin said the impact on Singapore's pharmaceutical sector “will likely be limited”, as the large US multinational pharma companies here, including Pfizer, Moderna, Merck, AbbVie and Bristol Myers Squibb, are likely to have invested or are investing in the US.

But he said “future new investments will likely be dampened as large multinationals channel their money into manufacturing capacity in the US”.

Other analysts also warned that the pressure on companies to re-shore manufacturing lines or build entirely new facilities in the US will snuff or at least delay the flow of investments into the pharmaceutical sector here, which accounts for more than 12 per cent of Singapore's domestic exports to the US.