Tariffs and Turbulence: How U.S. Trade Policy Is Reshaping the Biotech Landscape

A Sector at a Crossroads

The U.S. government's imposition of tariffs has introduced uncertainty into many industries—none more sensitive than biotechnology. From the production line to the lab bench and the clinical trial site, biotech companies are being forced to adapt. This article explores how tariffs are influencing biotech manufacturing, funding, and the globalization of clinical trials—particularly the emerging shift toward Europe.

Manufacturing on the Edge: Rising Costs and Shifting Supply Chains

Increased Production Costs

Nearly 90% of U.S. biotech firms rely on imported components for at least half of their FDA-approved products. New tariffs on imports from the EU, China, and Canada are projected to raise manufacturing costs significantly. A staggering 94% of firms foresee increased costs from the EU tariffs implemented on April 2, 2025. Although “pharmaceuticals” appear exempt from reciprocal tariffs, the scope of this exemption remains unclear.

Supply Chain Disruptions

The disruption is more than just financial. Tariffs are shaking up established supply chains, forcing companies to seek new suppliers or relocate production—a process that, according to a BIO survey, would take 12 months for most, and over two years for nearly half.

Reshoring Initiatives

In response, some companies are bringing manufacturing back home. Johnson & Johnson announced a $55 billion investment in U.S. facilities, while Eli Lilly plans $27 billion for four new domestic plants. Though promising, these efforts require time and capital—meaning short- to medium-term challenges persist.

Innovation Under Pressure: Funding in a Volatile Climate

Investor Uncertainty

Political instability, tariffs, and ongoing drug pricing reforms are chilling investment in biotech. Bankers cite these factors as major roadblocks to mergers and acquisitions—key mechanisms for funding innovation.

Increased Operational Costs

Tariff-driven expenses could divert funds away from R&D. For smaller biotech companies, this could slow progress toward breakthrough therapies and stretch already limited budgets.

Clinical Trials: Europe’s Growing Role

Cost Considerations

As domestic operational costs rise, trial sponsors are eyeing more cost-effective regions. Europe—with its established infrastructure and supportive regulatory ecosystem—is increasingly attractive.

Supply Chain Stability

Europe’s proximity to manufacturing hubs and integrated logistics may offer greater stability, a crucial factor in clinical trial planning.

Regulatory Efficiency

The European Medicines Agency’s centralized approval process can streamline multi-country trials, adding to the continent’s appeal for global biotech players.

Is Europe the New Frontier for Trials

While anecdotal evidence suggests a shift toward Europe for clinical trials, concrete data is still emerging. Tariffs may be a catalyst, but decisions on trial location also depend on patient demographics, disease prevalence, and trial design. The trend, though visible, is nuanced and still evolving.

Strategic Adaptation: A Role for Expert Guidance

Biotech firms aren’t navigating these challenges alone. Syner-G and Sequoia—a life sciences consulting powerhouse formed by the 2024 merger of Syner-G BioPharma Group and Sequoia Biotech Consulting—supports companies through this turbulent landscape. From helping startups secure funding to advising on supply chain shifts and clinical trial relocation, their integrated regulatory and operational strategies are helping the industry not just survive but thrive.

Conclusion: Navigating Complexity with Precision

Tariffs have undeniably disrupted the biotech ecosystem. Increased costs, shaken supply chains, and investor hesitancy are forcing firms to rethink operations. Europe may offer a partial solution, but the road ahead is complex. Biotech companies must adopt strategic, well-informed approaches to remain competitive. And with the support of experts like Syner-G and Sequoia, innovation may not just endure—it may accelerate.