As President Trump escalates tariffs and pressures global drugmakers, Wisconsin positions itself as a pharmaceutical hub with tax breaks, workforce advantages, and billion-dollar investments.

The pharmaceutical supply chain in the United States is undergoing a seismic shift. After decades of offshoring, President Donald Trump is betting on tariffs, executive orders, and pricing reforms to bring drug production back home. Wisconsin, with its manufacturing roots, tax incentives, and new investments, could stand at the center of this reindustrialization effort. But while state leaders tout opportunity, challenges ranging from global trade wars to regulatory hurdles loom large.

This feature-length article examines the forces driving pharmaceutical reshoring, the policies shaping the industry’s future, and the unique role Wisconsin may play in America’s drug manufacturing revival.

A nation dependent on foreign pharmaceuticals

For decades, the U.S. has relied heavily on foreign sources for critical medicines. John Knox, Principal Deputy Assistant Secretary for Preparedness and Response at the Department of Health and Human Services, underscored the problem: “Seventy percent of active pharmaceutical ingredients (APIs) and key materials are manufactured in China and India, while about 90% of antibiotics come from China. That’s a vulnerability we cannot afford.”

The COVID-19 pandemic first exposed the risks of this dependency, when global supply chains fractured and the U.S. scrambled for basic drugs. Since then, both policymakers and the public have become increasingly wary of relying on geopolitical rivals for life-saving treatments.

President Trump has made this issue central to his second term, framing it as both a national security threat and an economic opportunity. “The United States must never be held hostage by foreign powers when it comes to our medicines,” he declared earlier this year, while unveiling new tariff measures.

Central to Trump’s reshoring strategy are tariffs. In March 2025, the administration imposed sweeping new tariffs on Chinese imports, sparking retaliation from Beijing, Ottawa, and Mexico City (NYT, 2025). While agriculture and consumer goods bore the immediate brunt, pharmaceuticals were quickly drawn into the fray.

By July, Trump threatened a 200% tariff on pharmaceutical imports — an extraordinary move aimed at forcing companies to produce within U.S. borders (Chemistry World, 2025). Industry leaders warned of potential disruptions and price spikes, but administration officials countered that short-term pain would lead to long-term resilience.

Critics note that Wisconsin, historically battered by trade wars, could again find itself on the front lines. A March 2025 analysis suggested the state would be among the hardest hit by retaliatory tariffs, particularly in agriculture (UpNorthNewsWI, 2025). Yet, unlike dairy farmers and soybean growers, the pharmaceutical sector sees an opening for growth.

Wisconsin’s Pharmaceutical Landscape

While Wisconsin is not traditionally seen as a pharmaceutical powerhouse like New Jersey or Massachusetts, the state has quietly built a foundation for growth.

• Academic R&D: The University of Wisconsin–Madison ranks among the top research institutions in biomedical sciences, contributing to drug discovery and biotech startups.
• Manufacturing Heritage: Wisconsin’s long tradition in manufacturing — from paper mills to machinery — has created a skilled labor force adaptable to advanced pharmaceutical production.
• Strategic Location: Situated in the heart of the Midwest, Wisconsin offers distribution advantages, with proximity to Chicago, Minneapolis, and major interstate systems.

The state’s recent designation of Eli Lilly’s Kenosha facility as an Enterprise Zone marks a turning point. The pharmaceutical giant has pledged a $3 billion expansion there, a sign that global firms are beginning to view Wisconsin as fertile ground for large-scale drug production.

State Rep. Brent Jacobson (R-87th) argues that Wisconsin’s economic toolkit gives it an edge. “Wisconsin is fortunate to be home to a growing pharmaceutical sector, and one of the best ways to encourage continued growth is through the tax credit programs our state offers to manufacturers,” he said.

Among the most impactful incentives:

1. Manufacturing and Agricultural Tax Credit – allowing companies to offset taxes based on property investment.
2. Business Development Tax Credits – rewarding firms for capital spending and job creation.
3. Enterprise Zone designation – offering generous breaks to companies committing to significant projects.

Jacobson added, “I hope Lilly’s announcement will serve as an example to other pharmaceutical manufacturers of the success they will find here in Wisconsin. Incentivizing drug manufacturing in Wisconsin is certainly a priority of mine.”

Sen. Cory Tomczyk (R-Mosinee) framed the issue in geopolitical terms. “China is a known enemy of the United States and I welcome the efforts that the Trump Administration has made with China. Wisconsin would be a great place for reindustrialization for this critical industry. Wisconsin’s skilled labor force will be beneficial for any company that decides to invest here.”

Can Wisconsin compete?

Pharmaceutical reshoring is easier said than done. Analysts point to three major hurdles:

1. Cost Pressures: China and India have dominated production because of low labor and material costs. Replicating that efficiency in the U.S. requires either automation or significant subsidies.
2. Regulatory Barriers: FDA approval processes for new facilities are lengthy, meaning even committed investments could take years before yielding output.
3. Global Retaliation: Trump’s aggressive tariffs risk retaliatory measures, potentially raising costs for other industries critical to Wisconsin’s economy.

Still, there are reasons for optimism. Wisconsin’s lower operational costs compared to coastal hubs could attract firms priced out of states like California or Massachusetts. The state also benefits from proximity to raw materials, robust logistics networks, and a growing ecosystem of biotech startups.

Beyond tariffs, Trump has wielded executive power to influence drug pricing and production:

• “Most Favored Nation” Pricing – ensuring Americans do not pay more than citizens in peer nations.
• Medicare Negotiation Expansion – granting the government greater leverage over pharmaceutical costs.
• Direct Pressure on Big Pharma – including letters warning of government action if prices are not reduced.

Supporters argue that these moves align with reshoring efforts by making the U.S. a more attractive place for both producers and consumers. Critics, however, warn that unpredictability — tariffs one month, executive orders the next — creates an unstable environment for long-term investment.

The stakes for Wisconsin

Wisconsin stands at a crossroads. If reshoring succeeds, the state could see thousands of new jobs, billions in investment, and a strengthened position in the national economy. If it fails — or if global retaliation undercuts local industries — the state could once again bear the costs of trade wars without reaping the benefits.

Eli Lilly’s expansion in Kenosha is an encouraging start, but the question remains: will other major drugmakers follow suit?

The Trump administration’s aggressive push to bring pharmaceutical manufacturing back to U.S. soil has opened a window of opportunity for Wisconsin. With tax incentives, skilled labor, and major corporate investments, the state is well-positioned to capitalize. Yet the path forward is fraught with uncertainty — tariff battles, global competition, and regulatory hurdles could all slow momentum.

For now, Wisconsin lawmakers remain bullish. “Incentivizing drug manufacturing in Wisconsin is certainly a priority of mine,” Jacobson reaffirmed. If their optimism holds true, Wisconsin could become not just America’s Dairyland, but a critical hub in the nation’s pharmaceutical future.