Tariff Resilience in Life Sciences: Navigating Disruption with Agility and Precision

On July 15, 2025, Network Partners Group hosted an industry panel discussion titled Tariff Tesilience in Life Sciences, Navigating Disruption with Agility and Precision. This article provides an overview and analysis of the discussion.

Panel Discussion Details

Moderator:

• Ritu Dhami, Network Partners Group, President, Regulatory Affairs

Participating Panelists

The participating panel of experts from Regulatory, Quality, Supply Chain, and Operations is as follows:

Network Partners Group Executive Advisors

• Lee Evans – Global Regulatory Affairs, Pharmaceutical and Medical Devices
• Lynn Cinelli – Supply Chain and Valley Chain Strategy
• Niall Condon – Pharmaceutical and CTMOs and Medical Device
• William Kentrup – Quality Pharmaceutical

Arnold and Porter

• Claire Reade – International Trade

Watch the Panel Discussion Replay

Tariff Resilience in Life Sciences: Navigating Disruption with Agility and Precision

The Global trade environment is shifting. There is rising complexity around tariffs, supply chain constraints, and cross-border compliance. The panel of experts provided their strategic insights and actionable guidance on how tariffs impact the industry, where companies are most vulnerable and unprepared, and what it looks like to proactively build your tariff resilience plan that’s both strategic and executable.

Current Landscape and Future

Organizations are facing a significantly unstable environment caused by existing tariffs, threatened tariffs and other restrictions. It’s hard for organizations to see a clear path and stay on top of the tariff changes.

There are no tariffs on pharmaceuticals at the moment; however, there are a number of threats from unpredictability and a potential for real global disruption. An example is the recent 50% tariffs in response to domestic political actions in Brazil by the Trump legislation. If the use of domestic political actions unrelated to trade or the United States is used with other global trading partners, and this becomes a trend, there will be a new dimension of severe unpredictability. Even without this, there are a lot of tariffs to be concerned about right now in the summer of 2025.

Markets hope that things will settle down in the Fall and that the president won’t impose 20-35% tariff levels on the world as he has threatened for major trading partners. August 1, 2025, is the deadline for these high tariffs to come into play unless the countries come up with acceptable deals.

The Four Base Line Tariffs

For the last 20 years, there have been four “Baskets” on top of the normal baseline tariffs:

1.      Tariffs of China

2.     Tariffs on Canada and Mexico

3.     Reciprocal tariffs that apply to the rest of the world

4.     The globally imposed national security-based tariffs, which are imposed on various individual industry sectors, under Section 232 of the Trade Expansion Act of 1962.

Tariffs on the Rest of the World

China-origin goods continue to have high tariffs, which can be more than 50% cumulatively, given that there are tariffs in place from President Trump’s first term, plus the federal tariffs and the reciprocal tariffs that all stack one on top of the other. Currently, August 12th is the deadline for a deal with China to avoid additional 24% in tariffs.

President Trump announced a proposed tariff of 100% on countries that continue to trade with Russia if there is no peace deal with Russia starting in early September. That could affect Brazil, China, and India as well. Although trade is most likely precluded given the 50% tariff on Brazil.

Negotiations continue for the rest of the world with that August 1 deadline. Overall, the US government would generally prefer a minimum of 10 to 20% on imports. If countries are not cooperative within the Trump administration, then tariffs will be substantially higher in income comparison to a pre-tariff world war, where tariffs in the US averaged only 2%.

Indonesia has made a deal; however, the details are unknown currently.

Tariff threats could preclude trade with the countries, and countries may retaliate without hesitation. An example is the 30% tariffs that threaten the EU. Our trading partners have been shut out of the market, so there is no reason for them to hesitate to retaliate, which would impose even more costs.

There are court challenges for reciprocal tariffs being issued inadequately, and no expectation of resolution soon.

Most of the negotiations with Canada and Mexico have been related to the sectoral 252 tariffs. However, non-qualifying goods that come from Canada and Mexico which don’t need that content requirement, now face 25% tariffs and are under threat of 30% or 35% tariffs instead of 25% tariffs if negotiations don’t go well.

The National security tariffs under section 232 include 50% on cars, steel, aluminum, and copper, including steel, aluminum, and copper content in downstream products. All countries except the UK are subject to tariffs.

It is very important to understand that there is a list of downstream products that are subject to those tariffs that have already been published, and more products can be and will be added, including semiconductors and pharmaceuticals.

The semiconductor probe can affect any product with a chip in it, depending on how the recommendations go. And that means that manufacturing equipment, other equipment, and medical device equipment could all be implicated.

In the pharmaceutical investigation, it is unclear which drugs or APIs, or other key materials, can be hit with tariffs. If the president is looking at high-end drugs that are made in the EU, for example, and is thinking of lowering drug costs and increasing US manufacturing, this could end up with high-end, patented drugs being vulnerable.

Some companies, associations, and stakeholders have tried to educate the US government about what security issues are related to imports and pharmaceuticals to try and narrow the focus of infrastructure. It is a highly political environment, and very difficult to predict the outcomes.

The Department of Commerce has indicated it is going to have its recommendations on action to the president by the end of July. Most likely, the president will act very quickly.

Customs and the Department of Justice Enforcement

The Trump Administration is gearing up to intensify enforcement of customs rules connected to tariff rates. This affects the classification of the product and which HTS number it gets. The HTS number determines the tariffs that are in place on the product and is connected to the rules on valuation, which also affect tariff calculations and the country of origin market.

It is no longer just customs that is doing the enforcement. The Department of Justice is setting up a special task force, and there are other enforcement efforts underway.

Customs announced that it is undertaking intensified enforcement of long-standing country of origin marketing rules for drugs, prescription drugs sold to pharmacies, and then to consumers.

Marking duties can impose 10% of the US value of the merchandise for importing manufacturers that resell products. This is a significant risk, and in addition, the False Claims Act has also been used to tackle marking duties and other customs issues, and the Department of Justice can be involved, and there are Whistleblower incentives and troubled damages.

Office of US Trade Representative (USTR)

The Office of US Trade Representative (USTR) and its actions could further affect pharmaceutical imports.

USTR requested comments, which closed on June 27, 2025, on other countries’ policies and how they might harm the US pharmaceutical industry. These comments could influence the reciprocal tariffs rates and or the pharmaceutical Section 232 investigation at National Security investigation or they could lead to a new investigation under the same law that was used to put tariffs on China in President Trump’s first administration, it’s called section 301 and that could result in any manner of restrictions on countries if they are found to be acting unreasonably and harming US commerce.

US Commerce

The Department of Commerce has been tasked with looking at Export controls in the pharmaceutical industry.

What Can Life Sciences Companies Be Thinking and Doing About Tariffs?

Question 1: What are you seeing today in terms of actual tariff impacts on your particular area, and are companies actively responding, or are they still in a monitoring mode?

We work in a highly regulated environment; there is a lag from a regulatory perspective to make drastic shifts in your API or drug product supply chain. In terms of definite plans, it depends on the company, the function of the product lifecycle, and the company’s portfolio.

The Trump administration is focusing on trying to internalize domestic manufacturing and production.

Long-term capital in our business is really 5 years out. If making an imminent decision on capital, you might weigh the factor of domestic manufacturing a little bit more than you may have in the past, versus cost or lead time, etc. Quality and Cost for the Supply Chain are important.

• Consider pulling in inventory ahead of when tariffs come in. Work distribution centers or intermediator plants in the valley chain to hold additional products, and where managing the effects of that could you have available logistics to be able to move those things if you did not have that contracted out.
• Have at least two suppliers. When you have options, you could revamp sourcing in the 6 to 12-month period and rebalance with internal plants versus external plants.

What blind spots do companies typically have when they are thinking about Tariffs?

There are 4 key elements to consider:

1. Country of Origin,
2. The right tariff codes,
3. The relevant documentation for customs, and specifically,
4. The value of the product.

From the FDA’s perspective, from making sure everything is compliant from their side. From the custom ramping up and making sure everything is as it should be.

• Companies may not have followed their policies specifically, and now is the time to make sure they are.
• Partnering with Trade, Compliance, Legal, and Quality.
• Looking at details, keeping close to every communication channel. The more that you have got that inquisitive mind across the different communication channels the more reactive or almost proactive you can be with the new news that is coming.

Country of Origin

• The country of origin is specific to the substantial transformation of your product.
• There are certain strategic elements that you, as an organization, can be thinking about with the information in tariffs in the different jurisdictions coming ou,t and what you do with your supply chain as well.
• Tariffs and duties are often embedded in the prices you get from the supplier. Understanding what is often overlooked and understanding the buildup of those prices has.
• Strengthen your dialogue with your suppliers on origin, documentation, compliance, and classification.

Leverage Opportunities

You have the tariffs and the imports that you do not want hung up in Customs.

• It’s all about supply, sustainable to supply to our patients what is most important, and keeping those important and enhancing those connections interdepartmental.
• Being proactive before you are caught on the reactive side, which could have dire consequences.
• Compliance people need to be linked in.
• Enough resources to do the actual work that is needed, given the enhanced risks right now.
• Custom brokers can be terrific resources; however, it’s conceivable that practices were taken, or that positions were established that actually should be looked at again.
  • Ask customs, don’t assume what looks like it has low tariffs

Question 2: If you were advising a leadership team building a tariff resilience plan for the next one to two years, what are the top things you would tell them to prioritize?

A comprehensive plan including all the organizations, such as quality, supply chain, manufacturing, procurement, legal, and trade affairs, to make sure you are looking at all the elements.

In that plan, gathering the data and understanding your product and its product flow, whether that’s financial flow, or the physical flow, the country of origin data down to the filings, the MAs that you have approved, the locations that are approved through sourcing, and making sure that is in the comprehensive plan.

Some level of advocacy to the government organizations and mapping your exposure, also benchmarking your competition.

• Understand your product portfolio and your supply chain types, benchmark where your other competitors are playing.
  • Are those products strategic and help security, or are they vaccines that are essential medicines that are needed? Understanding those opportunities, exploit or take advantage of them.

C Suite

It’s important to have a SWAT Team where you can actually very quickly elevate the importance and speak the language of the business to be able to really give the impact of tariffs appropriate attention.

• What is the risk to your financials?
• Do you understand what the price differences may do to demand, to you, to your suppliers, and to your customers?
• What is the order of effects of making some shifts for yourself and your competition, and hopefully, take advantage of that?
• What is the exposure or risk to the company?
• Are these risks temporary, or are they going to have meaningful effects on your company’s earnings?

Activities that will help you better prepare and form the choices you can have.

• Take your cost and understand the cross structure
• Take cost out where you can. Make a zero-based budget
• Value stream mapping, do not complicate, simplify the supply chain
• Get a full understanding of supply, quality, and the legalities, and keep that simple, keeping it connected and communicated.

Question 3: Generic Manufacturers and Branded – What are the unique challenges between the two, and how would you advise them to approach tariff planning differently?

Branded, or large pharma companies that have a lot of resources, broad global supply chains, and have some ability to manage various levels of tariffs on what it is, which could significantly impact their bottom lines. Those companies have prepared plans, have options, and have a PMO project management team around this to be able to manage the everyday questions.

Contract Development and Manufacturing Organizations (CDMOs), whether US-based or non-US, are looking at more opportunities. If they are in the US, they are seeing more inquiries, more dual preparation in terms of face-to-face work that they’re doing, and companies are asking them to look at the US option versus non-US options. Companies are preparing for a different future there.

Having an organization or team around this, having the data, and understanding your product, is going to take you a long way in terms of answering the questions and producing the optimal answer for your particular business.

What capabilities should life science companies invest in now to be better prepared for the ongoing trade volatility?

Traceability. We are moving from globalization to realization in terms of the general macro forces. Transparency is a critical element of that, and it is not just for tariffs, it is for circularity, sustainability, and forced labor. The enforcers will have the data, you will have the data, it’s going to be important from both ends to be able to match that data, and important that you have a system that can track and trace.

Data integrity. How you share this data, oversight, and governance for it to achieve all the things we talked about in the panel discussion; the flowability, that it is done in a compliant manner for business reasons as well, from a patient protection, patient safety perspective.

Every place you can get involved across your manufacturing organization: supply chain, quality, strategy, manufacturing sites, tech transfer folks, and so forth, but of course, if you have a centralized procurement, trade folks, and very importantly, finance and tax. Your product has a financial flow, which is important too, and that must be part of the discussion, part of the planning, and part of the options that you look at.

From a Regulatory perspective, how should they be involved?

Regulate early. There are multiple pieces from a regulatory perspective, depending on decisions that impact manufacturing, which could trigger submissions. And then time and validations that support those submissions. Will the change result in a Regulatory Agency inspection? If there are changes to the product, what impact does that have on your tariff, on your tariff code, or your tariff classification, and the country of origin?

Conclusion:

In conclusion, companies facing uncertainty with tariffs need to:

• Create a proactive, not reactive plan.
• Engage in teamwork, communication, collaboration, and leverage early engagement.
• Have relevant and dedicated resources.
• Know who to reach out to and who is covering what base.
• Leverage Supply Teams and an Independent Arbitrator.
• Identify strategies that have the right decisions in them.
• Ensure no disconnects between day-to-day activities and the C Suite.
• Gain awareness of policy and advocacy changes in legislation.
• Understand Patient Impact.
• Evaluate cultural thinking.
• Have the option or consideration for a 3rd party to assist or review.
• Involve Regulatory and cross-functional teams.

It’s also important to consider the risks:

• There is a cost for quality and compliance, but the cost and impact of noncompliance can be far greater.
• Make sure the documented decisions in your strategy now are the right decisions; otherwise, it could have a negative impact.
• If you are not engaging early in this subject matter and evaluating the shift, you might have a disconnect, which can have a patient impact or an inability to do something.
• Without the proper team environment, cultural thinking/topics in a company viewed as minor, administrative, “This is the way we always did it”, may NOT be the way to do it.
• There are major uncertainties and risks to business in multiple directions, which makes planning difficult.

If you need help with your tariff resiliency planning, the regulatory experts on this panel and Network Partners Group are here to help. Contact us today and schedule a call to discuss how we can help you achieve success.