Johnson & Johnson plans to increase U.S. investments by 25% to over $55 billion in the next four years. The Trump administration’s threat of drug import duties is compelling companies to expand their manufacturing operations domestically, prompting this move.
The pharmaceutical giant said on Friday that it planned to build four new plants as part of its investment. It officially broke ground on one of them earlier in the day in Wilson, North Carolina. J&J did not disclose the locations of the other plants.
According to at least two investors, most of these investments were already planned. “The $55 billion number also includes a portion of their regular, annual R&D and IT spending,” said Jeff Jonas, portfolio manager at Gabelli Funds, which holds shares of J&J. He added, “So, they’ve thrown a lot in there to get to a big, splashy number.”
U.S. companies like Eli Lilly and Apple are investing in domestic production. This is happening amid the Trump administration’s push to manufacture locally.
Lilly recently committed to investing $27 billion in U.S. plants over five years. This investment is intended to ease the impact from a potential 25% tariff on pharmaceutical imports.
The proposed levy could affect companies such as J&J and Pfizer. They have sprawling operations outside the U.S.
Apple also plans to invest $500 billion in the U.S. over four years. However, this may include existing commitments.
“In the short term, they are trying to lobby for a tariff exemption,” Jonas said. He added, “In the medium/longer term, everyone is moving even further towards a local manufacturing strategy. Even if there is a tariff deal, the era of free trade and unrestricted globalization is over.”
According to him, tariffs are unlikely to hit J&J’s medicine business. However, they could have a minor impact on the medical devices unit.
J&J, the world’s largest drugmaker by revenue, said it already has more manufacturing facilities in the U.S. than in any other country. The company also plans to expand existing U.S. sites and build new research and development infrastructure.
Analysts expect J&J’s medicines sales to cross $60 billion by 2028.
“If J&J can capture their future pharmaceutical revenue from domestically produced products, then that certainly will be better in the face of the proposed tariffs,” said Brian Mulberry, portfolio manager at J&J investor Zacks Investment Management.
J&J plans to invest more than $2 billion in its site in Wilson. The site is expected to create 5,000 jobs during the construction stage and more than 500 positions across the state.
The company said the site will produce treatments for cancer, immune and neurological diseases. J&J is based in New Jersey.
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