Merck Slashes Annual Forecast Amid Uncertainty Caused by Trump's Trade Policies
Pharmaceutical company Merck adjusts its yearly targets downward as a consequence of Trump's import tariffs. - Pharmaceutical company Merck reduces annual objectives due to Trump's trade tariffs impacts.
In a surprising turn of events, German pharmaceutical and technology giant Merck KGaA is trimming down its annual targets amidst the swirling trade policies set forth by President Trump. This DAX Company, based in Darmstadt, has cited the tumultuous economic and geopolitical climate, intense currency fluctuations (particularly against the US dollar), and the "ongoing uncertainties regarding tariffs" as chief culprits, particularly affecting their business in laboratory equipment.
Merck Stands Firm in the US
For the current year, Merck now anticipates revenue spanning between €20.9 and €22.4 billion euros, marking a retreat from its initial goal of €21.5 to €22.9 billion euros. The company also expects a marginally lower operating profit, estimating it to be between €5.8 to €6.4 billion euros. Despite these setbacks, CEO Belén Garijo remains optimistic, stating, "We remain bullish about Merck's ability to achieve sustainable growth for 2025 and beyond."
To further underline their commitment to the US market, Merck recently acquired U.S. cancer specialist SpringWorks Therapeutics, despite ongoing tariff tensions.
Uncertain Times for Big Pharma
Merck generates roughly a quarter of its revenue in North America, making it susceptible to the unstable dollar, which has depreciated substantially against the euro, influenced by the tempestuous trade policies emanating from the White House. This currency depreciation leaves them with fewer euros when converting dollars.
Trump has also hinted at imposing tariffs on medicines that currently enjoy exemption from import duties. Some products within Merck's largest segment, including single-use containers for drug production and water purification devices, are being impacted by U.S. tariffs. Furthermore, Trump's aim to slash drug prices in the US is fueling a wave of uncertainty.
In the first quarter, Merck embarked on a recovery journey post the COVID-19 boom, during which the company found fertile ground in vaccine manufacturers. Revenue inched up approximately 3% year-on-year to €5.28 billion euros, with a surge in business within the pharmaceutical sector. There was also burgeoning demand for semiconductor materials associated with AI applications.
The company's operating result (adjusted EBITDA) increased by nearly 6% to €1.54 billion euros, surpassing analyst projections. Net income climbed to €738 million euros, up from €699 million euros the previous year.
- Merck KGaA
- Trade Policies
- Chemical Industry
- Laboratory Equipment
- United States
- Currency Fluctuations
- President Trump
- Tariffs
- Uncertainty
- Pharmaceutical Industry
- The trade policies set forth by President Trump, particularly those affecting tariffs, have led to significant uncertainty in the global chemical and pharmaceutical industries, with Merck KGaA reducing its annual forecast due to this unrest, especially in the business of laboratory equipment.
- Despite the ongoing uncertainties in finance and economics, caused by President Trump's trade policies, Merck KGaA remains firm in its commitment to the US market, recently acquiring SpringWorks Therapeutics to strengthen its presence in pharmaceuticals, demonstrating their resilience and optimism for sustainable growth.
