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 pharma tariff weighs heavy on Korean drugmakers
United States President Donald Trump delivers remarks as he signs executive orders in the Oval Office in Washington, D.C., Thursday (local time). EPA-Yonhap
By Nam Hyun-woo
Definition of 'building plant' puzzles companies planning investments in US
United States President Donald Trump's announcement of a 100 percent tariff on pharmaceutical products is confusing Korean biotech firms, who are planning investments in the country, as no detailed and clear guidelines have been offered.
Trump announced Thursday (local time) that the duty will be imposed from Oct. 1, unless a company is “building” a manufacturing plant in America.
Korean biotech firms have been considering investing in the U.S. to cushion the impact of tariffs, citing the president’s earlier remarks suggesting that industries investing in America could potentially receive tariff exemptions. However, the situation has become uncertain after Trump added preconditions that exempt only companies building new plants.
Trump wrote on social media, “Starting October 1st, 2025, we will be imposing a 100 percent Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America.”
He continued that “building” will be defined as “'breaking ground' and/or ‘under construction,’” noting that there will be “no Tariff on these Pharmaceutical Products if construction has started.”
United States President Donald Trump's post on Truth Social / Captured from Truth Social
As a result of Trump’s previous threats of tariffs ranging from 100 to 250 percent, the Korean pharmaceutical and biopharmaceutical industry has been securing inventory in the U.S. and pursuing plans to acquire or establish U.S. production facilities to strengthen its local manufacturing base.
However, Trump’s latest remarks created new uncertainties because he stressed “BUILDING” as the precondition for tariff exemptions.
On Tuesday, Celltrion announced a 1.4 trillion won ($1 billion) investment plan for the U.S., including a $330 million deal to acquire Eli Lilly’s drug substance plant in New Jersey.
Celltrion said the plant is already a fully operational manufacturing facility, and the company will spend 7000 billion won to expand the facility in the near future through renovations and other facility modifications.
Upon announcing the plan, Celltrion Chairman Seo Jung-jin said “the company has hedged all tariff risks,” and was “saving a significant amount of expenses.”
However, because it is an acquisition of existing production facilities, even with renovation work expected, it remains unclear whether the acquisition meets Trump’s definition of “building.”
“We will need to closely monitor the situation until specific policies are announced, but the company has already prepared short-, mid- and long-term response plans regarding U.S. tariff policy,” Celltrion said regarding Trump’s post.
“We have secured a two-year stockpile in the U.S., so there will be no tariff concerns during that period. Afterward, products manufactured at our local plant will be supplied to the U.S. market, so we believe the tariff risk will be eliminated.”
Samsung Biologics' plant 4 in Incheon / Courtesy of Samsung Biologics
Samsung Biologics is facing a potentially more difficult situation. For years, Samsung Biologics has sought opportunities to secure manufacturing facilities in the U.S., the world’s largest pharmaceutical market, but has not made a similar announcement.
The company’s main business of biologics contract manufacturing targets major clients in the U.S. Although tariffs are borne by importers, they impose burdens on producers through their impact on price competitiveness.
Samsung Biologics said the company is “monitoring how the details of pharma tariffs will be set,” without elaborating further.
Lotte Biologics says they expect only minimal impact on its contract manufacturing business. The company said it does not expect any significant risks because it already has a plant in the U.S., although they will continue monitoring developments. It began its contract manufacturing business by acquiring a biopharmaceutical plant in New York from Bristol Myers Squibb in 2022. The construction of its domestic plant in Incheon is underway.
Yuhan Corp.'s lung cancer treatment Leclaza / Courtesy of Yuhan Corp.
Chemical drugmakers also said they expect there will be no significant impact.
Yuhan Corp. said its lung cancer treatment Leclaza is manufactured by Johnson and Johnson, while it is exporting most of its drug substances to the European market. GC Biopharma also noted that its plasma-derived therapy Alyglo is fully manufactured through American substances.
Some industry officials assume that Trump’s post could be a negotiation strategy given that the U.S. government is now working with global drugmakers to lower pharmaceutical prices in the U.S., and Trump has set a deadline for 17 major drug companies next week.
“The details are still unclear,” an industry official said. “With the drug price negotiation deadline approaching on Sept. 29, this could be a tactic to pressure pharmaceutical companies. So for now, the best option for us is monitoring developments.”