Nam Hyun-woo has worked as a staff writer at The Korea Times since 2013, mostly covering business and politics. He currently belongs to the Business Desk where he covers topics such as emerging tech, AI, ICT and Korea's chaebol community. Prior to joining the team, he was the paper's correspondent for the presidential office of Korea during the Yoon Suk Yeol and Moon Jae-in administrations.
Trump's drug tariff plan likely to intensify pressure on Korea-US trade talks
U.S. President Donald Trump signs a series of executive orders related to health care in the Oval Office of the White House in Washington, D.C., Monday (local time). EPA-Yonhap
By Nam Hyun-woo
US poised to impose tariffs on pharmaceuticals within next 2 weeks
United States President Donald Trump resumed his tariff-based pressure on Tuesday, saying that he plans to announce pharmaceutical tariffs “within the next two weeks.”
The scope and potential impact of the drug tariffs on Korean industries remain unclear, but Trump’s mention of a specific timeframe is seen as an indication that Washington is accelerating tariff negotiations with its trade partners, including Korea.
The push came amid ongoing working-level talks between the trade authorities of the two countries, centered around what Korea calls a "July package" — a set of trade deals aimed at mitigating the effects of Washington's proposed "reciprocal" and item-specific tariffs. As the U.S. moves to accelerate negotiations, concerns are growing over Korea’s weakened bargaining power amid a vacuum in its political leadership.
While signing an executive order to incentivize prescription drug manufacturing in the U.S., Trump revealed the pharmaceutical-specific tariff plan. His administration announced last month that it had launched a Section 232 investigation into the impact of pharmaceutical imports on national security, which was seen as a precursor to imposing tariffs.
According to the Korea Biotechnology Industry Association, the U.S. imported $3.97 billion worth of pharmaceuticals from Korea last year, 94.2 percent of which were biopharmaceuticals.
Given Trump's February remarks that pharma and chip firms could face tariffs exceeding 25 percent, Korea's domestic industry has been preparing for various scenarios, though none can predict the full scope or extent of the tariff's impact.
“The idea of pharmaceutical tariffs is nothing new, as Trump has been implying so,” an official at a domestic biotech firm said. “We have been considering various response measures depending on how the situation unfolds, but with no clear information on the scale or structure of the tariffs, all we can do for now is wait and see.”
A Samsung Biologics researcher tests equipment at the company's No. 4 plant in Incheon in this photo released Monday. Courtesy of Samsung Biologics
Samsung Biologics, a contract development and manufacturing company, said during its earnings call last month that it is “monitoring potential risks” related to the proposed drug tariff, but noted that any impact on its current order backlog would likely be reflected in earnings two to three years from now.
Celltrion said in January that it had secured sufficient inventory in the U.S. to meet demand and is expanding to manufacture finished drug products through local contract partners.
Pressure on 'July package'
Industry officials said Trump’s remarks are significant because they came after Washington spent nearly a month negotiating the so-called reciprocal tariffs with its trade partners, which are now under a 90-day reprieve.
With the reprieve set to expire on July 8, the U.S. has been ramping up pressure on its trade partners, including Korea, by repeatedly stressing the need for faster conclusions because it has to complete individual tariff negotiations with more than 90 countries.
During a rally to mark his 100th day in office on April 29, Trump said of the tariff negotiations that he wants “to be nice, but if it takes too long, I’ll just set a price.”
U.S. Treasury Secretary Scott Bessent also put pressure on April 29 by claiming that the Korean government wants to conclude the July package deal before Seoul’s June 3 presidential election.
Though Korea’s Ministry of Economy and Finance denied this, Washington’s pressure is likely to intensify as Korea faces weakened negotiating power amid its leadership vacuum.
After former Deputy Prime Minister for Economic Affairs Choi Sang-mok stepped down on May 1, Korea’s acting president is now Deputy Prime Minister for Education Lee Ju-ho. Korea has been designing its current plan to pursue the July package deal, which covers tariffs, economic security, investment cooperation and foreign exchange policies, under Choi's direction.
“Overall, Trump’s remarks on pharmaceutical tariffs appear to be a continuation of his existing rhetoric rather than a new policy direction,” said Jang Sang-sik, head of International Trade Research Institute at the Korea International Trade Association.
“By mentioning sensitive sectors such as drugs and films after partially deferring auto tariffs, he appears to be preserving negotiating leverage. The comments are seen as both a domestic political message for the U.S. and a strategic move to pressure Korea and steer the July package negotiations in Washington’s favor.”
Against this backdrop, the trade ministers of the two nations are scheduled to hold talks on the sidelines of the APEC Trade Ministers’ Meeting, slated for May 15 and 16 here. They are expected to review the outcomes coordinated at the working level and finalize the agenda for further negotiations.