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An employee checks filled capsules inside a Cadila Pharmaceutical company manufacturing unit at Dholka town on the outskirts of Ahmedabad, India, April 12, 2025.
Pharma manufacturers face tariff uncertainty
Donald Trump’s administration announced that it is opening investigations into pharmaceutical and semiconductor supply chains, which will likely result in tariffs that will hurt suppliers in Europe, India, and Canada.
The move shows that, despite stiff political and market resistance, Trump still believes tariffs will benefit his country in the long term by rebalancing trade and boosting manufacturing jobs.
The pharma announcement caused headaches for Canadian producers of generic drugs and pharma ingredients, who are warning of dangerous disruptions to supply chains if the US administration acts erratically.
Trump said last week that pharma tariffs would bring a manufacturing boom to the United States: “They will leave other places because they have to sell — most of their product is sold here, and they’re going to be opening up their plants all over the place.”
But, as with other of Trump’s tariffs, the move could boost prices for consumers while offering uncertain benefits for US industry. Trump’s unpredictability itself is a major liability. Because of strict permitting controls, pharma facilities take years to build, and Trump’s frequent reversals may convince companies it’s unwise to make long-term investments.
Biden tightens China’s access to chips one last time
Throughout Joe Biden’s presidency, the Commerce Department has gradually tightened its chokehold on China’s access to semiconductors needed to access, train, and build artificial intelligence. On Dec. 2, Commerce Secretary Gina Raimondo announced what she told reporters amounted to the “strongest controls ever” meant to restrict China’s access to AI for military applications. Today, China responded with its own new restrictions, sending a strong signal to the incoming US president.
The new US controls announced Monday, the third order in as many years, apply to 24 types of semiconductor manufacturing equipment, three types of software tools, and high-bandwidth memory, or HBM, an interface often used in producing AI chips. The department also added 140 Chinese companies to its Entity List, which requires regulatory approval should a US company wish to sell to a member of the list. “By adding key semiconductor fabrication facilities, equipment manufacturers, and investment companies to the Entity List, we are directly impeding the PRC’s military modernization, WMD programs, and ability to repress human rights,” said Matthew Axelrod, assistant secretary for export enforcement at the Commerce Department.
In response, on Dec. 3, China banned shipments of certain materials using gallium, germanium, and antimony to the US, as well as super-hard materials such as diamonds. These items can be used both for military and semiconductor applications. “China firmly opposes the US overstretching the concept of national security, abuse of export control measures, and illegal unilateral sanctions and long-arm jurisdiction against Chinese companies,” said Lin Jian, a Chinese Foreign Ministry spokesperson.
Jacob Feldgoise, an analyst at Georgetown University’s Center for Security and Emerging Technology, said the new US order plugged holes in the previous year’s rules. It requires a license for many more exported tools, focuses on high-bandwidth memory “because HBM is used by nearly all of the most capable AI chips” and strengthens the US’s grasp beyond its borders. “Notably, this set of controls is newly extraterritorial: It will impose licensing requirements on certain foreign-produced tools so long as they contain US technology,” Feldgoise said.
Xiaomeng Lu, director of Eurasia Group's geo-technology practice, noted that the US excluded the Chinese semiconductor company ChangXin Memory Technologies from the Entity List to appease the Japanese government. CXMT has been buying materials from Japanese suppliers to make its memory chips. “With the Trump administration on its way, they are expected to take a more unilateral approach and will be less likely to make concessions per requests of allies,” she said.
Jeremy Mark, a nonresident senior fellow at the Atlantic Council's GeoEconomics Center, said it’s difficult to judge how significant these new rules are because of the looming change of guard in the White House. Had they come ahead of the transition to a Kamala Harris administration, “they would continue making life complicated for Chinese semiconductor companies and US companies that rely on the China market for a significant portion of their sales.” However, Mark said that Donald Trump could strengthen or weaken export controls when he takes office, so it’s “impossible to say” what the legacy of this final move will be.
For Biden, it marks the end of an era of success: While his restrictions on China could have been tighter or less porous, he leaves office with China still searching for AI breakthroughs. The US, at least under Biden’s watch, is still on top.
But China’s next-day retaliation shows that it is ready to play hardball ahead of the incoming Trump administration. Beijing understands that diplomacy alone might not do the trick, and that to succeed in getting America to the bargaining table it needs to safeguard its own crucial resources. “This is a step up in China’s reaction to US technology sanctions,” Lu said. “China is very frustrated with the lack of communication channels with the incoming administration. They are trying to send a shot across the bow to get attention from the Trump team.”
The next era of global superpower competition: a conversation with the New York Times' David Sanger
Listen: In 2019, Chinese President Xi Jinping and Russian President Vladimir Putin met at a summit and described their “friendship without limits.” But how close is that friendship, really? Should the US be worried about their growing military and economic cooperation? On the GZERO World Podcast, Ian Bremmer sits down with Pulitzer prize-winning national security correspondent for The New York Times David Sanger to talk about China, Russia, the US, and the 21st-century struggle for global dominance. Sanger’s newest book, “New Cold Wars: China’s Rise, Russia’s Invasion, and America’s Struggle to Defend the West,” looks at the new and increasingly unstable era of geopolitics where the US, China, and Russia are vying for power and influence like never before. Bremmer and Sanger discuss the US intelligence failures that led to the current geopolitical reality, what the US needs to do to combat the growing cooperation between our two biggest adversaries, and why semiconductor factories are more important to national security than aircraft carriers.
Subscribe to the GZERO World Podcast on Apple Podcasts, Spotify, Stitcher, or your preferred podcast platform, to receive new episodes as soon as they're published.- Podcast: Not infallible: Russia, China, and US democracy with Tom Nichols & Anne-Marie Slaughter ›
- Podcast: How a US-China war could happen: Warning from ret. admiral James Stavridis ›
- The biggest threats to US national security, foreign and domestic ›
- Podcast: China's great economic slowdown ›
- Podcast: Why Putin will fail: former Finnish PM Alexander Stubb ›
- Putin needs Xi to win the war in Ukraine - GZERO Media ›
The biggest threats to US national security, foreign and domestic
Less than a month ago, the Biden administration finally dropped its long-anticipated National Security Strategy. The No. 1 external enemy is not Russia but rather China. It also emphasizes the homegrown threat of Americans willing to engage in political violence if their candidate loses at the ballot box.
On GZERO World, Ian Bremmer speaks to New York Times national security correspondent David Sanger about the key national security threats facing the United States right now.
Sanger believes the biggest threat to America's national security right now is an "insider threat" to the stability of the election system coming from Americans willing to engage in political violence. Taiwan's status as a semiconductor superpower may be staving off a Chinese invasion.
On Russia, Sanger believes that Ukraine and the world face the paradox that the better Ukraine gets at resisting Russia, the more likely Putin might launch a tactical nuke. And if he does, he might just get away with it.
This interview was featured in a GZERO World episode: US threat levels from foreign and domestic enemies
- What threatens the USA? ›
- Podcast: America at risk: assessing Russia, China, and domestic threats ›
- US threat levels from foreign and domestic enemies ›
- Standing up for democracy and the truth: Former US national security official Fiona Hill ›
- Putin needs Xi to win the war in Ukraine - GZERO Media ›
- The next era of global superpower competition: a conversation with the New York Times' David Sanger - GZERO Media ›
US threat levels from foreign and domestic enemies
The Biden administration finally released its long-anticipated National Security Strategy, basically America's biggest threats — foreign and domestic.
The No. 1 external enemy is not Russia but rather China. It also emphasizes the homegrown threat of Americans willing to engage in political violence if their candidate loses at the ballot box.
On GZERO World, Ian Bremmer speaks to David Sanger, who knows a thing or two about national security because it's his beat at the New York Times.
His take on China? Taiwan's status as a semiconductor superpower may be staving off a Chinese invasion.
On Russia, Sanger discusses how Kyiv and the world face the paradox that the better Ukraine gets at resisting Russia, the more likely it is that Vladimir Putin will consider launching a tactical nuke. “If the Russians use a tactical nuclear weapon in a conventional war and essentially get away with … then all of a sudden, the taboo about using nuclear weapons in a conventional conflict is gone,” he says.
Meanwhile, America should not lose sight of the "insider threat" to its democracy, particularly with midterms just days away.