Tariffs and trade war: A guide for expanding biotech business internationally

Biotech companies have always been global at their core. From running clinical trials across continents to delivering therapies internationally, success in these industries also depends on crossing borders seamlessly. But today, the path to international expansion for biotech is more complex than ever, as the global trade and tariffs environment is shifting rapidly.

Navigating these challenges requires strategic foresight. In this article, we draw on the expertise of Dr. Shan Nair, founder and president of Nucleus, a firm specializing in guiding tech and life sciences companies through international expansions. So, is expanding biotech businesses internationally still achievable? Let’s find out!

Tariff and trade mayhem, what is going on? 

Tariffs today have become more than just economic tools, they are political weapons. As Nair puts it, “The tariffs are being used as an economic and semi-political weapon, targeted primarily at China, but also hitting friendly countries. They’re at one level today, another tomorrow, and suspended the day after. It’s very difficult for businesses to make any plans.”​ The unpredictability of tariff rules makes long-term international planning a far more complex exercise for biotech companies than it was even a few years ago.

For biotech specifically, the impact of tariffs is nuanced. As Nair explains, the core activities of many biotech companies, such as drug discovery, clinical research, and early-stage development, are somewhat shielded from direct tariff consequences: “If you mean biotech companies doing clinical trials, I don’t think they’re going to be impacted very much.“​ Pharmaceuticals and clinical trial services have, for the most part, been exempt from new tariffs​ in the past.

However, certain biotech sectors are more exposed. Companies manufacturing specialized laboratory equipment or diagnostic machines, for instance, may face higher costs if key components are subject to new duties. “If you think about companies producing technical equipment, then yes, they could be impacted,” Dr. Nair adds​. Even in those cases, firms may mitigate risks by localizing parts of their manufacturing processes, reducing the need for cross-border shipping of finished goods.

While drug development companies may indeed be shielded from direct tariff hikes as finished pharmaceuticals have generally remained exempt from major U.S. and China tariffs, the broader picture for biotech is more complex.

Supply chain disruptions, increased costs for lab equipment, reagents, and specialized manufacturing components have created significant challenges for many biotech firms, especially smaller players. Recent reports suggest that even when core activities like clinical trials are not directly affected, the ripple effects of a strained global trade environment are still felt across the industry, including investor confidence.

Overall, while the biotech industry as a whole might not bear the brunt of the current tariff storm, certain niches will need to rethink their international strategies carefully. And for all companies, the increased uncertainty around trade policy means global expansion today requires more cautious, adaptive planning than ever before.

How biotechs can still expand internationally: Strategies for 2025 and beyond

Despite the mounting challenges of international expansion, biotech companies cannot afford to retreat into domestic markets alone. Scientific innovation, talent pools, and future revenue opportunities remain global by nature. The companies that succeed in this new environment will not necessarily be the boldest, but the best prepared. From early planning to protecting intellectual property and building resilient operations, expansion strategies today demand more precision and flexibility than ever before.

The basics: Plan early, adapt quickly

Expanding into international markets can be a critical growth lever for biotech companies, but success rarely happens by accident. Building a strong global presence requires careful early-stage planning, a deep understanding of regional differences, and the ability to adapt strategies as market conditions evolve.

One of the most common mistakes companies make, according to Nair, is underestimating the true cost and complexity of expansion. “The biggest misconception is that companies think expansion can be done fairly cheaply. In reality, it involves significant costs: hiring, licenses, dealing with bureaucracy,” he explained​. Without realistic budgeting and thorough preparation, companies risk cutting corners, which can lead to costly regulatory or operational failures down the line.

Another frequent pitfall is assuming that practices from one market can be easily transposed to another. Local regulations, cultural expectations, and operational requirements can vary dramatically. For example, as Nair points out, even a simple employment offer letter can trigger problems if not adapted to local legal norms: “If somebody’s in the U.S. was hiring an employee in France, and sent a U.S. ’employment-at-will’ letter, they would immediately lose certain rights under French law, like putting the employee on probation.”​

Nair gave another example of a company that expanded in China without doing the basic research about whether its activity and the way it was planning on operating were authorized there. Two years later, the company had to close down the whole operation and pay fines after having hired people.

In addition to what you are obligated to do legally, there is an important cultural factor. “If you’re going to do work in Japan, it is important whether or not you need to, from a tax perspective, to have a Japanese subsidiary. This is because, if you only have a Japanese branch, the customers tend to think that you have much less commitment to the Japanese market. It’s also important for your managing director to be in Japan, to be able to show that you have substance in the country and that you are not operating on a fly-by-night basis,” said Nair.

Early operational missteps can have long-term consequences. In some countries, regulatory violations or improper early filings can create legal liabilities years after market entry​. To avoid this, biotech firms need to set up robust compliance frameworks from the outset, not treat compliance as an afterthought once operations are underway.

In today’s volatile global environment, agility is just as important as preparation. Regulatory landscapes, trade policies, and funding conditions can shift rapidly. Companies that succeed are often those that build flexible international strategies.

As Nair summarizes, “Ultimately, global expansion is about balancing risk and reward. Companies must prepare thoroughly but remain flexible enough to adapt when things don’t go exactly as planned.”​

Safeguard your intellectual property

As biotech companies look to expand internationally, protecting intellectual property (IP) becomes a critical and often complicated priority. IP enforcement standards can vary significantly across countries, creating substantial risks for innovators.

According to the World Intellectual Property Organization (WIPO), jurisdictions differ widely in how effectively they protect life sciences patents, with countries like China, India, and Brazil presenting ongoing challenges despite recent reforms. The U.S. Trade Representative’s 2024 Special 301 Report also highlights persistent IP enforcement problems in China, India, and Russia, identifying them as key sources of infringement risks for biopharmaceutical companies.

As Dr. Shan Nair notes, “The main country where IP protection laws are weak is China,” adding that proactive measures can help companies minimize exposure.

Industry best practices to safeguard IP during global expansion include filing patents early in target markets, selectively using trade secrets where enforcement is unreliable, and carefully vetting local partners.

Nair noted that separating operations in different countries can also be a solid IP risk mitigation strategy. “One client manufactured partly in Vietnam, partly in China, partly in South Korea, so no single party had access to the full IP.”

Building the right talent and infrastructure

According to Nair, hiring local talent is often a smarter move than relocating staff from headquarters, particularly for early-stage international operations. Local employees bring an essential understanding of regional business practices, cultural expectations, and regulatory nuances, helping companies navigate complex new markets. “Generally, you would not relocate staff unless you have to,” said Nair. “You want someone who understands both your corporate culture and the local culture.” Relocation, expensive and sometimes culturally ineffective, is usually reserved for specific projects or career development paths rather than as a default expansion strategy.

Finding specialized biotech talent, however, can be a challenge depending on the region. While hubs like Boston or Basel offer rich pools of biotech expertise, emerging markets may require additional investment in training or partnerships with local academic institutions to build capabilities​.

Regarding infrastructure, when evaluating potential locations for manufacturing sites or logistics hubs, companies today must look beyond simple cost calculations. As Nair points out, key factors include the reliability of the electricity grid, the quality of transport links, and the availability of government grants or incentives. 

Poor infrastructure can delay operations, drive up costs, and expose companies to risks that tariffs only exacerbate. In today’s volatile global environment, an unstable supply chain or a delayed shipment caused by poor transport systems can trigger not only operational headaches but also unexpected tariff or compliance complications.

Global growth is still possible, but not without new risks

In today’s turbulent trade environment, international expansion remains as vital to biotech success as ever, but it comes with a new set of challenges that companies cannot afford to ignore. Tariffs and geopolitical tensions have complicated the logistics of doing business across borders, forcing biotech firms to rethink where and how they operate globally.

The global nature of scientific innovation, clinical research, and market opportunities means that biotech companies cannot simply retreat to their domestic markets. However, expanding internationally today demands more than ambition. It requires careful, early planning, agile strategies, strong operational frameworks, and a deep understanding of local regulations and cultural expectations.

Economic uncertainties, funding pressures, and regulatory volatility further underscore the importance of building resilient operations from the outset. Nair said companies must be realistic about the resources needed for a successful expansion: “Make sure you have an adequate budget to do the job properly, and if you don’t, then wait until you do.”

The tariff landscape may add complexity, but for companies that prepare thoroughly and stay flexible, international growth remains a powerful and achievable driver of long-term success. And as Nair pointed out, while the tariff landscape might put a strain on sales, it could also push biotech companies to think of smarter international expansion strategies, making them more resilient in the future.