In the 2026 U.S. midterm elections, the Democratic Party achieved a sweeping victory, gaining control of both the House and Senate, which has drawn attention from the domestic pharmaceutical and biotech industries regarding the future of the drug tariff policies under the Trump administration. Experts largely agree that, since drug tariffs are implemented under presidential executive authority, significant policy changes are unlikely in the short term. However, pressures for local production in the U.S. and a continued stance against China are expected to persist regardless of the political landscape.
According to industry sources on November 4, the Democratic Party's decisive win in this election, seen as a report card for the first half of Trump's second term, is likely to strengthen oversight of the administration's trade policies. Nevertheless, experts share a consensus that "there will not be immediate significant changes" due to the drug tariffs being driven by the president's executive powers under Section 232 of the Trade Expansion Act.
Jung Yoon-taek, head of the Pharmaceutical Industry Strategy Research Institute, stated, "Historically, drug tariffs have been enacted through executive orders rather than congressional approval. Even with the Democrats in a stronger position, the fundamental policies of the Trump administration are unlikely to change." He added, "While the impeachment issue may hinder aggressive policy drives as in the past, the focus on domestic interests will continue."
Lee Seung-kyu, vice president of the Korea Biotechnology Industry Organization, also predicted that the midterm elections would not have an immediate impact on domestic pharmaceutical and biotech companies. However, he noted that "the unpredictable and fluctuating policies of the Trump administration may be somewhat alleviated by the Democratic victory."
In April, the Trump administration announced a policy imposing tariffs of up to 100% on imported patented drugs and related raw materials. Under a trade agreement between the two countries, a 15% tariff applies to Korean patented drugs. Biologics and generic drugs, which are key export items for domestic companies to the U.S., are exempt from these tariffs. The U.S. government plans to review the need for additional tariffs on these items by April next year.
The pressure for local production in the U.S. is expected to continue. In response, major domestic biotech companies such as Samsung Biologics, Celltrion, and Lotte Biologics have already secured production facilities in the U.S. The stance against China is also likely to persist regardless of the election results. Analysts suggest that if Chinese companies face restrictions in the U.S., domestic contract development and manufacturing organizations (CDMOs) could seize new market opportunities.
However, there are concerns. Since companies must meet local production requirements to be exempt from tariffs, there is a risk that advanced manufacturing bases and investment capital that should remain in Korea may shift to the U.S. This could pose a burden for export-dependent companies lacking local production bases.
Jung emphasized, "Rushing to invest based solely on tariff impacts and hastily concluding projects is not advisable," noting that high labor costs in the U.S. could make local production infrastructure burdensome for companies. He added, "Global companies are also slowing down the pace of building production facilities as they monitor the situation, and our companies should focus on areas of cooperation with the U.S. amid the ongoing containment of China."
According to industry sources on November 4, the Democratic Party's decisive win in this election, seen as a report card for the first half of Trump's second term, is likely to strengthen oversight of the administration's trade policies. Nevertheless, experts share a consensus that "there will not be immediate significant changes" due to the drug tariffs being driven by the president's executive powers under Section 232 of the Trade Expansion Act.
Jung Yoon-taek, head of the Pharmaceutical Industry Strategy Research Institute, stated, "Historically, drug tariffs have been enacted through executive orders rather than congressional approval. Even with the Democrats in a stronger position, the fundamental policies of the Trump administration are unlikely to change." He added, "While the impeachment issue may hinder aggressive policy drives as in the past, the focus on domestic interests will continue."
Lee Seung-kyu, vice president of the Korea Biotechnology Industry Organization, also predicted that the midterm elections would not have an immediate impact on domestic pharmaceutical and biotech companies. However, he noted that "the unpredictable and fluctuating policies of the Trump administration may be somewhat alleviated by the Democratic victory."
In April, the Trump administration announced a policy imposing tariffs of up to 100% on imported patented drugs and related raw materials. Under a trade agreement between the two countries, a 15% tariff applies to Korean patented drugs. Biologics and generic drugs, which are key export items for domestic companies to the U.S., are exempt from these tariffs. The U.S. government plans to review the need for additional tariffs on these items by April next year.
The pressure for local production in the U.S. is expected to continue. In response, major domestic biotech companies such as Samsung Biologics, Celltrion, and Lotte Biologics have already secured production facilities in the U.S. The stance against China is also likely to persist regardless of the election results. Analysts suggest that if Chinese companies face restrictions in the U.S., domestic contract development and manufacturing organizations (CDMOs) could seize new market opportunities.
However, there are concerns. Since companies must meet local production requirements to be exempt from tariffs, there is a risk that advanced manufacturing bases and investment capital that should remain in Korea may shift to the U.S. This could pose a burden for export-dependent companies lacking local production bases.
Jung emphasized, "Rushing to invest based solely on tariff impacts and hastily concluding projects is not advisable," noting that high labor costs in the U.S. could make local production infrastructure burdensome for companies. He added, "Global companies are also slowing down the pace of building production facilities as they monitor the situation, and our companies should focus on areas of cooperation with the U.S. amid the ongoing containment of China."
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.