How Tariffs Influenced AstraZeneca's $50bn US Investment

US President Donald Trump's programme introducing tariffs has led many businesses to base operations in the US.

AstraZeneca is the latest to establish a stronger presence in the US to prepare for uncertainty, revealing a plan to invest US$50bn by 2030.

Endless tariff impositions

President Trump's ever-expanding list of tariffs not only focuses on specific nations, with 35% for Canada and 50% for Brazil, but they also target industries including pharmaceuticals and automotives.

In May, the President said the US would “no longer tolerate profiteering and price gouging from big pharma", threatening a tax of up to 200% on foreign drugs – potentially hitting organisations around the world.

Speaking to the press on 15 July, he said: “Pharmaceuticals will be tariffed, probably at the end of the month, and we’re going to start off with a low tariff and give the pharmaceutical companies a year or so to build and then we’re going to make it a very high tariff.”

Investing for growth

In light of these changes, AstraZeneca, headquartered in Cambridge, England, declares its intention to funnel US$50bn into US endeavours by 2030.

US Commerce Secretary Howard Lutnick said: "We are proud that AstraZeneca has made the decision to bring substantial pharmaceutical production to our shores.

“This historic investment is bringing tens of thousands of jobs to the US and will ensure medicine sold in our country is produced right here.”

AstraZeneca's funds will develop a new drug manufacturing facility in Virginia, as well as enhance R&D and cell therapy production in Maryland, Massachusetts, California, Indiana and Texas.

The company's revenue hit US$54.1bn in 2024 and aims to reach US$80bn by 2030.

Expanding within the US is anticipated to help achieve this, with predictions that half of its sales will derive from the region.

Sir Pascal Soriot, CEO of AstraZeneca, says the investment underpins the company’s “belief in America’s innovation in biopharmaceuticals and our commitment to the millions of patients who need our medicines in America and globally". 

Chair of AstraZeneca Michel Demaré adds: “Central to this investment is a proposed new, state-of-the-art drug substance manufacturing facility in Virginia focused on chronic diseases, which is set to be our largest manufacturing investment to date.

“This milestone underscores our commitment to the vibrant US biopharmaceutical innovation ecosystem, strengthens our global R&D and manufacturing footprint and will broaden our impact on patients across the US and around the world.”

Transatlantic expansion

AstraZeneca joins a group of major pharmaceutical companies expanding their US operations.

In April, Swiss pharmaceutical giant Roche revealed plans for a US$50bn US manufacturing investment over the next five years, targeting the creation of over 12,000 new jobs.

At the same time, rival Novartis is planning a US$23bn investment in the US.

American companies are also increasing their US investments: Johnson & Johnson, for example, plans to commit US$55bn to manufacturing and R&D efforts.

The pattern appears outside the pharmaceutical sector as well, with Apple announcing a massive US$500bn US investment over the next four years.