Pharma largely unfazed as Greenland tariffs roil markets
Drugmakers, which have spent the past six months reaching tariff deals with Trump, seem to expect some immunity from a new batch of tariffs on European countries.
President Trump’s threats to slap tariffs on European countries as the US intensifies efforts to acquire Greenland have put the US stock market into panic mode. Drugmakers, which are some of the most valuable companies in Europe, have so far avoided the worst of it.
Trump said in a Saturday social media post that the US would impose 10% tariffs on eight European countries — Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland — by February 1 unless they reach a deal to allow the purchase of Greenland. That rate would rise to 25% by June 1 if an agreement isn’t reached.
By noon on Tuesday, the first trading day since the proclamation, the S&P 500 had fallen 1.2%. The NYSE Arca Pharmaceutical Index, meanwhile, fell by just 0.5%.
Drugmakers — many of them European, such as Novo Nordisk, or with a large manufacturing presence in the continent, such as Eli Lilly — spent the latter half of 2025 striking deals with the Trump administration that make them immune to tariffs, usually in exchange for a mix of commitments to lower drug prices and invest in the US.
Novartis CEO Vas Narasimhan told CNBC on Monday that he expects the company’s deal with the administration, announced last month, to protect it from tariffs. Either way, by the middle of the year he expects the company to have fully domestic manufacturing for its US market.
“We also have an agreement with the US government that excludes us from any tariffs we think, but in case that were not to be the case, we’re also future-proofed in the other direction as well,” Narasimhan told the network at the World Economic Forum.
European countries predominantly export branded drugs, which are of higher dollar value but represent a smaller proportion of prescription drugs compared to generics, which are often produced in Asia. They also represent the most expensive drugs Americans pay for, as the administration shifts its domestic policy focus toward reducing the cost of living.
Diederik Stadig, an economist at European bank ING, said that while it’s difficult to know without details from the White House, he expects the deals reached with drugmakers to hold up.
“The deals he has struck with pharma companies mean that [Trump] gets his wish: they have committed to manufacturing and investing more in the US and will be exempt from tariffs in exchange,” he said. “I would therefore doubt that this 10% would apply to pharmaceutical companies that struck a deal with Trump.”
If the 10% tariffs do apply to pharmaceuticals, the hardest-hit countries would be Germany, the Netherlands, and the UK, Stadig noted. Still, the tariff rate on paper is typically much higher than the effective tariff rate “because this administration has instituted tariffs but not invested in enforcement.”
“The more specific tariffs are, the harder they are to enforce,” he said.
