Analysis Report: K-Bio's Response to U.S. Tariffs and Expansion of Local Production

Market Summary and Analysis 

As the U.S. government decided to impose high tariffs on imported pharmaceuticals, Korea received a preferential tariff of 15 percent. 

 

Biosimilars, a key Korean export item, were included in a one-year tariff grace period, so short-term damage has been averted.

 

Key Response Strategies by Company 

Large pharmaceutical and biotech companies are aggressively building local production infrastructure in the United States in preparation for the reassessment in one year. 

 

Samsung Biologics completed its acquisition of a plant in Rockville, Maryland, securing a local base. 

 

Celltrion is raising its localization rate by producing the drug substance for Zymfentra at its New Jersey plant. 

 

Lotte Biologics is expanding the share of its Syracuse plant to preemptively solidify its contract development and manufacturing competitiveness.

 

Implications for Investors 

With drug substance production infrastructure in the United States in short supply, global volumes are likely to shift to contract development and manufacturing companies with local production capacity in order to avoid tariffs. 

 

Value chain companies that have not rested on the short-term grace period but have completed investments to diversify their North American production networks are expected to benefit strongly over the mid to long term, so investors should keep a close eye on the fundamentals and order trends of related companies.