Swiss pharmaceutical giant Novartis‘ CEO has said he “thinks” the company has an agreement with the U.S. to shield it from tariffs.
Speaking at Davos, Novartis CEO Vas Narasimhan told CNBC’s Karen Tso and Steve Sedgwick that its $23 billion investment in manufacturing, announced last year, was a moat against levies.
He was speaking after U.S. President Donald Trump pledged to impose 10% tariffs on the U.K., Denmark, Norway, Sweden, France, Germany, the Netherlands, and Finland by Feb. 1, as he ramps up economic pressure as part of a campaign to acquire the self-governing Danish territory of Greenland. The levy will rise to 25% from June 1, Trump said.
The continent’s pharma sector could be one of its worst hit by the proposals, given that medicines and other related products are one of the EU’s largest exports to the U.S..
EU exports of pharma products to the U.S. came in at 84.4 billion euros ($98.1 billion) during the first three quarters of last year.
“We expect to be in a position by middle of this year where we are not really exposed to tariffs, because we’re able to produce in the U.S. for the U.S. We have inventory on hand,” Narasimhan said.
“We also have an agreement with the US government that excludes us from any tariffs we think, but in case that were not to be the case, we’re also future-proofed in the other direction as well,” Narasimhan added.
Zurich-listed shares in Novartis hit record highs on Wednesday last week, at $116.06 per share. The stock was flat on Monday, the first trading day after the tariffs were announced.
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