Strategist and former diplomat Kurt Tong warns firms to prepare for US-led supply chain realignment
Top business executives and industry experts convened Tuesday at the 2025 US Strategy Roundtable for Pharma and Biotech to assess Korea’s biotech standing at a critical juncture of global restructuring led by the US and to share perspectives on navigating the challenges ahead.
Aimed at advancing discussions on major shifts in the global biopharmaceutical industry, the one-day session -- held at the Korea Chamber of Commerce and Industry under the theme of securing biotech growth amid shifting policies and supply chain realignments -- was hosted by The Korea Herald, with sponsorship from One Law Partners and Korea Bio.
“The pharmaceutical and biotech industries are of immense importance because they deal with life itself,” said former Justice Minister Kang Kum-sil, now a partner at One Law Partners, in her welcoming remarks.
"Politics and the economy are deeply intertwined, and political shifts can greatly impact markets. I’m grateful to have experts in US policy and Asia’s economic landscape offering insights on how to navigate these challenges,” Kang added.
The forum featured a keynote presentation by Kurt Tong, managing partner at The Asia Group, a Washington-based strategic and investment advisory firm, who shed light on the evolving global biopharmaceutical supply chain.
A former veteran diplomat with over 30 years of experience in the US Department of State, Tong was also one of the original architects of the US-Korea Free Trade Agreement.
According to Tong, as the pandemic underscored the fragility of relying on foreign suppliers, particularly in sectors like medicines, the US has moved toward a more protectionist stance.
"There’s a desire to bring more pharmaceutical manufacturing and biologics back to the United States, reducing dependence on foreign production. It’s not just about research and development, but also manufacturing -- and tariffs were the tool President Trump focused on to achieve that," he said.
Although Tong mentioned that a potential 25 percent sectoral tariff on pharmaceuticals is a significant concern, there may be room for adjustments from the US.
"This pharmaceutical charge can get lower or maybe even be postponed, as drug prices are a highly sensitive issue in the United States. The number one complaint of American citizens about medical care and pharmaceuticals is not the effectiveness nor the availability, but the price," he added.
The second critical issue discussed was the growing national security concerns related to biotech, particularly with China's increasing influence in this sector. According to Tong, biotech is no longer just a commercial enterprise but "a matter of national security."
The discussion highlighted initiatives like the US's Biosecure Act, designed to protect sensitive biotech research and development from potential foreign exploitation, a move that could accelerate the emergence of separate global bio supply chains, one centered around the United States and the other around China.
As for Korea’s position, Tong advised that Korean firms must engage in "careful maneuvering" between the US and China.
“Korean companies should conduct thorough research to understand the implications of the current landscape, particularly regarding the BioSecure Act and the US's national security approach to pharmaceuticals and biotech tariffs,” he said.
He explained that the policy environment is likely to become more volatile, move faster and see greater government intervention over the next 10 to 20 years. "As opportunities arise, such as new partnerships in the CRO sector and reshoring, Korean companies must remain agile and proactive," he added.
In addition to supply chain shifts, Lee Young-ju, a partner at the ESG Center of One Law Partners, addressed where Korean firms stand on environmental, social and governance compliance.
“Korean companies' awareness of ESG is not very high, with an average score of just 42 out of 100,” she said. “The actual level of response to ESG issues is even lower than their awareness.”
She pointed out that while the Trump administration has taken steps back on environmental regulations, this retreat is not absolute and that certain policies -- such as those addressing carbon emissions and sustainability -- remain relevant and could resurge in the future.
Regarding the European Union, a consistent leader in tightening environmental regulations, Lee remarked: “The EU has already taken proactive steps in regulating environmental standards and companies need to be ready for compliance."
She cited examples such as the Carbon Border Adjustment Mechanism and the Corporate Sustainability Due Diligence Directive.
Lee noted that as these regulations pick up speed, they will become a major test of business competitiveness for Korean companies. "Although the short-term impact may seem limited, it’s crucial for companies to establish ESG frameworks and prepare to manage these challenges to enhance their competitive edge," she added.
minmin@heraldcorp.com
