Trump’s pharma tariff could trigger global investor exodus

 

A sweeping new tariff on branded and patented pharmaceuticals is poised to backfire on the United States, and global investors are already positioning for the fallout.

 

This is the immediate reaction from Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory and asset management organizations, following the 100% duty announced by President Donald Trump, due to take effect on October 1.

 

It is designed to force drug manufacturing back onshore. Instead, it threatens to raise costs, disrupt supply chains and accelerate capital flows away from US markets.

 

Nigel Green, chief executive of deVere Group, warns that the move undermines the very goal it claims to serve.

 

“A tariff of this magnitude on high-value medicines will ripple through every part of the global health economy,” he says.

 

“Rather than sparking a manufacturing renaissance, it’ll deter investment, heighten inflationary pressure and drive sophisticated capital to markets that remain open and predictable.”

 

The stakes are enormous. US pharmaceutical imports have surged to more than $200 billion a year, reflecting a tightly knit global production system that cannot be uprooted quickly.

 

Active ingredients and critical components often cross borders multiple times before a finished treatment reaches a patient.

 

“You can’t rebuild decades of specialized infrastructure overnight,” he notes. “Investors see that reality more clearly than policymakers.”

 

This tariff arrives as the US already wrestles with rising healthcare costs and persistent medication shortages.

 

Analysts expect higher prescription prices within months, as importers and distributors pass on the new levy.

 

“The inflationary impulse is obvious,” Nigel Green says. “Global investors will look beyond headlines and position for a weaker dollar and firmer pricing power in non-US pharmaceutical hubs.

 

“Capital is fluid; and it won’t wait for Washington to change course.”

 

He points to the broader context of trade confrontation. The administration has expanded national-security probes into robotics, industrial machinery and medical devices, signalling that pharmaceuticals are only one front in a wider campaign.

 

“The message to markets is that the US is prepared to weaponize tariffs across critical sectors,” observes Nigel Green.

 

“It invites reciprocal measures, further fragmenting supply chains and creating precisely the uncertainty that long-term investors avoid.”

 

Their strategies are already likely to be shifting. Emerging markets with strong life-sciences infrastructure and stable trade regimes are drawing fresh attention.

 

Currencies tied to those economies could see renewed strength as funds diversify away from the dollar. Equity allocations are likely to tilt toward firms and jurisdictions insulated from US trade policy.

 

“The instinct is to move toward reliability,” Nigel Green says. “Regions that maintain open markets and support cross-border production will command a premium.”

 

He also highlights the knock-on effects for the wider US economy. Pharmaceutical research and development relies on predictable global inputs.

 

If those flows are interrupted, pipeline delays and cost overruns will ripple into healthcare providers, insurers and ultimately consumers.

 

“Investors are calculating the second-order consequences,” he explains. “When the supply of essential medicines is threatened, it affects productivity, labour markets and overall economic confidence.”

 

Nigel Green adds that the policy could erode America’s competitive standing in an industry that thrives on international collaboration.

 

“Restricting access to world-class ingredients and expertise will not strengthen the US. It will encourage global talent and capital to deepen their commitments elsewhere.”

 

The timing compounds the challenge. With US inflation still above the Federal Reserve’s long-term target and interest-rate cuts only just beginning, another source of upward price pressure complicates monetary policy.

 

“Investors will read this as a fresh reason to hedge US exposure,” Nigel Green says.

 

“They’ll increase allocations to assets that benefit from dollar weakness and to regions that can supply essential drugs without disruption.”

 

Despite official assurances that construction of new domestic plants will accelerate, the practical barriers are immense. Building advanced pharmaceutical facilities takes years and billions in capital, and the global expertise required cannot be conjured by decree.

 

“Markets understand that this is not a switch you flip,” Nigel Green remarks. “In the interim, shortages and higher costs are almost inevitable.”

 

He concludes that the market response will be swift as “capital hates uncertainty.”

 

By introducing a sudden, sweeping tariff in a critical sector, “Washington has ensured that global investors will reweight toward economies and industries where policy risk is lower. This is likely to be the opposite of reshoring, rather it can be expected to lead to exporting investment.”