U.S. deal could shield Pharma company Novartis from tariffs: CEO
Swiss pharmaceutical giant NovartisThe CEO said he “thinks” the company has a deal with the U.S. to protect itself from tariffs.
Speaking in Davos, Novartis CEO Vas Narasimhan told CNBC’s Karen Tso and Steve Sedgwick that the $23 billion manufacturing investment announced last year is a moat against taxes.
He was speaking after US President Donald Trump vowed to impose 10% tariffs on Britain, Denmark, Norway, Sweden, France, Germany, the Netherlands and Finland by February 1 as he ramped up economic pressure as part of his campaign to buy Denmark’s self-governing territory of Greenland. Trump said the tax will increase to 25 percent as of June 1.
Considering medicines and other related products, the continent’s pharmaceutical sector may be one of the worst-hit sectors by the proposals. It is one of the EU’s largest exports to the USA.
EU exports of pharmaceutical products to the USA amounted to 84.4 billion euros ($98.1 billion) in the first three quarters of last year.
“We expect to be in a position by the middle of this year where we won’t really be exposed to tariffs because we can produce in the US for the US. We have stock,” Narasimhan said.
“We also have an agreement with the US government that excludes us from the tariffs we are considering, but we are prepared to go the other way if that is not the case,” Narasimhan added.
Novartis’s Zurich-listed shares hit a record high of $116.06 per share on Wednesday last week. The stock was flat on Monday, the first trading day after the tariffs were announced.
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