Pharma Industry Uncertainty in Wake of On/Off Greenland Tariffs

In recent weeks, the global political and economic landscape has been jolted by the high-stakes standoff involving the United States, the European Union, and the strategic territory of Greenland. President Trump issued a startling ultimatum: he would impose a 10% tariff on imports from eight European nations—Denmark, Germany, France, the UK, Norway, Sweden, the Netherlands, and Finland—unless they supported his plan for the United States to purchase Greenland (1). These levies were scheduled to rise to 25% by the summer of 2026 if a deal was not reached.

The Industry Alarm

The threat sent shockwaves through highly regulated sectors, particularly the life sciences. PharmTech Editorial Advisory Board member Henrik Johanning, Senior Vice President at Epista Life Science, voices the concerns of many industry leaders regarding the potential for massive supply chain destabilization. He warns of the operational risks, stating, “The pharmaceutical industry depends on deeply integrated US-EU cross-border flows of, for example, APIs, intermediates, equipment, and specialized services. Tariffs driven by geopolitical negotiations risk destabilizing already validated manufacturing and sourcing supply chains that cannot be reconfigured quickly without regulatory burden, increased cost, and delays to innovation and ultimately patient access.”

Johanning further emphasizes that drug development and manufacturing are "highly dependent on cross-border flows" between the US and Europe, and that introducing trade barriers for political leverage created material uncertainty for complex global networks.

European Resistance and the "Trade Bazooka"

European leaders did not remain passive. The European Commission pointed to its Anti-Coercion Instrument (ACI), often referred to as a "trade bazooka," which allows the EU to retaliate against economic blackmail with its own tariffs and restrictions on services or capital markets (1). While UK Prime Minister Sir Keir Starmer sought to avoid a trade war, stating that such a conflict was "in nobody’s interests," the EU indicated it would do "everything necessary" to protect its interests.

Johanning notes the local tension in Denmark earlier this week as the rhetoric escalated. “Trump is on everyone’s lips these days in Denmark,” he noted on January 20. “From a Danish perspective, last week’s meetings in Washington (2) between the foreign ministers were generally seen as constructive and pragmatic. That said, it appears the situation is now being framed rather differently by Trump himself.”

The Davos Pivot

The tension reached a crescendo during the World Economic Forum in Davos, Switzerland on January 21, 2026. President Trump delivered a special address, characterizing Greenland as a "core national security interest" and a "big piece of ice" that only the United States could properly defend (3). He claimed that while he sought "right, title and ownership," he would not use force to acquire the island. He also teased the construction of a "golden dome" for North American defense, which he claimed would be built on Greenland's territory.

Following the speech, the Trump administration indicated it was backing away from the immediate threat of tariffs in favor of a "framework for a future deal" (4).

The Challenge of Geopolitical Fluidity

Despite the withdrawal of the tariff threat, Johanning points out that the damage of such "tactical" maneuvers lingers. “What stood out to me in Davos was less the immediate policy substance and more the signaling,” he says. “The subsequent indication that the administration may be backing down on Greenland-related tariffs only reinforces how fluid and tactical this phase still is. For highly regulated industries like pharmaceuticals, that fluidity is exactly the challenge.”

References

1. Jordan, D; Legget, T; Josephs, J. How Could Europe Respond to Trump's Greenland Tariffs? BBC.com. Jan 19, 2026.
2. Nawaz, A; Till, M. A Look at the Strategic Importance of Greenland as Trump Escalates Threats. PBS.org. Jan 14, 2026.
3. World Economic Forum. Davos 2026: Special Address by Donald J Trump, President of the United States of America. WEForum.org. Jan 21, 2026.
4. Pellish, A; Palmer, D. Trump Says He Won’t Impose Tariffs After Reaching Greenland Deal ‘Framework’. Politico.com. Jan 21, 2026.