Donald Trump’s latest tariff threats appear to come with a very specific, and very costly, loophole: a “Made in USA” label. The prevailing analysis suggests that the punitive duties, especially the 100% tariff on pharmaceuticals, are not designed to be a blanket ban, but a powerful incentive for foreign companies to shift their production onto American soil.
This strategy has been all but confirmed by the reactions of major corporations. Swiss drugmakers Roche and Novartis, for example, have expressed confidence they will be exempt from the tariffs specifically because they are in the process of building and investing in US manufacturing sites. Their escape plan is to embrace the “Made in USA” model.
For the United Kingdom’s pharmaceutical industry, this presents a stark and difficult choice. Lacking the protection of a trade deal, its only apparent path to avoiding the tariff is to follow the Swiss example and commit to a massive, long-term investment in American facilities. This would mean moving jobs and capital out of the UK.
The British government is now fighting to create another escape route through diplomacy. Its efforts to “press the US for outcomes that deliver real benefits for UK industry” are a direct attempt to avoid being forced into this costly onshoring decision.
This “tariff with a loophole” approach is a classic carrot-and-stick policy. The stick is the threat of crippling duties. The carrot is continued access to the lucrative US market for any company willing to align its manufacturing strategy with the White House’s “America First” goals. It’s a powerful tool that could reshape global manufacturing maps, one industry at a time.