Uncertainty over tariff policy under the Trump administration is rising again, putting industries on edge. Concerns are growing in South Korea’s biotech sector as the possibility emerges of steep U.S. tariffs on Korean-made pharmaceuticals that have been exported duty-free. Companies say they plan to limit exposure by building inventory and starting production in the United States.
According to industry officials on the 23rd, the Trump administration has intensified trade pressure on partners worldwide after the U.S. Supreme Court ruled that reciprocal tariffs imposed under the International Emergency Economic Powers Act, or IEEPA, were illegal. President Donald Trump said on Feb. 20 (local time), shortly after the ruling, that he would use Section 122 of U.S. trade law to impose a 10% tariff on imports from all countries. The next day, he raised it to 15%, the maximum allowed under that provision.
The administration has also signaled it could impose tariffs under Section 301 of the Trade Act and Section 232 of the Trade Expansion Act, which would be tougher than the earlier reciprocal tariffs. The court decision invalidated only the IEEPA-based reciprocal tariffs and does not affect tariffs grounded in other statutes.
After the ruling, the Office of the U.S. Trade Representative began unfair-trade investigations of major partners under Section 232. In South Korea, it has been investigating whether trade is unfair in nine categories, including pharmaceuticals, since last year. The Korea International Trade Association’s trade research unit said additional tariffs on at least seven categories could materialize by September due to Section 232.
With tariff risks resurfacing, South Korean biotech companies are moving faster. Celltrion will begin producing biologic drugs this month at its Branchburg, New Jersey, facility, which it acquired from Eli Lilly. The plant has capacity of 66,000 liters for drug substance production, and Celltrion plans to expand it to 132,000 liters by 2030 through additional investment. The company previously secured two years’ worth of supply for the U.S. market.
A Celltrion official said the company has prepared both preemptive inventory and longer-term measures, including operating a U.S. plant, and will respond so that any tariff policy does not affect the company.
Samsung Biologics is accelerating work to complete an acquisition. It plans to finish the takeover process by next month for a biologics plant in Rockville, Maryland, which it bought in December, and to start local production immediately after completion. The plant currently has capacity of 60,000 liters, and Samsung Biologics is considering an expansion of 20,000 to 40,000 liters.
Lee Seung-gyu, vice chairman of the Korea Bio Association, said biotech companies are minimizing tariff impacts by securing production facilities in the United States, and he urged the government to seek needed support while listening to industry views.
* This article has been translated by AI.
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