The confidence expressed by Swiss pharmaceutical firms Novartis and Roche in the face of new US tariff threats provides a powerful lesson for other multinational corporations: proactive hedging against political risk is now an essential business strategy. Their advantage lies in the fact that they began investing heavily in US manufacturing long before the current crisis erupted.
While the UK’s pharmaceutical industry was relying on a promise of “preferential treatment,” Novartis and Roche were pursuing a more concrete strategy. By building and expanding their physical footprint in the United States, they were effectively buying an insurance policy against the very kind of protectionist threat that has now emerged.
This proactive hedging has now placed them in an enviable position. While their competitors are scrambling and lobbying, Novartis and Roche can calmly state that they do not expect to be hit. Their US investments have become their shield, aligning their corporate interests with the political goals of the White House.
This offers a stark contrast to the reactive position of many other companies and governments. The UK is now in a frantic race to achieve through last-minute diplomacy what the Swiss firms secured through long-term strategic planning.
The lesson for the future is clear. In an era of unpredictable trade policy and rising economic nationalism, relying on political goodwill is a risky gamble. The Novartis and Roche advantage demonstrates that the most effective way to hedge against this risk is to make tangible investments that create jobs and economic value within key markets, thereby making your company a domestic partner rather than a foreign competitor.
