EU risks becoming “Pawn” in U.S. economic power play

U.S. President Donald Trump’s decision to impose 100% tariffs on branded and patented pharmaceuticals manufactured abroad poses a serious threat to Germany’s pharmaceutical sector, according to the Berlin-based industry group Verband Forschender Arzneimittelhersteller (vfa).

The group noted that the move contradicts previous agreements between the U.S. and the European Union, which had capped tariffs at 15%. The implementation of 100% customs duties could have a significant impact on international supply chains, increasing production costs and potentially endangering patient care in both the U.S. and Europe.

vfa President Han Steutel said that investments are already being frozen and described the measure as the last thing Germany needs at this time. He added that existing trade agreements are now under question and emphasised the importance of finding rapid and effective support for European firms.

Steutel highlighted that a “strong and sovereign Europe” could serve as a counterbalance to the growing economic power of the U.S. He noted that while the EU market serves 450 million people, it is spread across 27 countries, whereas the U.S. can address the needs of 300 million people in one go.

The U.S. remains the most significant export market for Germany’s pharmaceutical industry, supporting roughly 130,000 jobs. Last year, German pharmaceutical exports to the U.S. totalled €27 billion ($31.5 billion).

President Trump announced the decision on Thursday via the U.S.-based platform Truth Social, stating that pharmaceuticals produced abroad will face the 100% tariff if the manufacturer has not yet begun establishing a production facility in the U.S. The measure aims to bring drug production back to the U.S., strengthen supply chains, and promote domestic manufacturing.

Steutel noted that the decision is intended to reduce dependence on imported medicines, making domestic alternatives more attractive, particularly during global crises.

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