GLOBAL CONSTRUCTION AND SUPPLY CHAIN TARIFF
UNCERTAINTY
Navigating Tariff Uncertainty in Global Pharma Construction and Supply Chains
Kevin R. Batche Vice President, Procurement & Logistics IPS-Integrated Project Services
The evolving landscape of global trade policy— particularly around potential U.S. tariffs—is adding complexity to pharmaceutical construction and supply chain operations. IPS is helping clients adapt with flexible, strategic solutions designed to maintain project momentum despite policy uncertainty.
The Impact of Evolving Trade Policy
The pharmaceutical construction sector is intricately linked to global trade conditions. Shifting policies, especially proposed U.S. tariffs on pharmaceutical imports and essential materials such as steel and aluminum, are influencing investment timelines, procurement decisions, and project delivery approaches.
While these tariffs have not yet taken effect, the potential implications have led to heightened caution in project planning. Clients are reviewing capital plans, adjusting long-lead procurement, and building in contingencies to accommodate potential cost and sourcing impacts.
IPS Adapts to Support Client Decision-Making
As a provider of full-scope engineering, procurement, and construction management (EPCM) services, IPS is adapting its project execution model to help clients manage this emerging complexity.
Clients are increasingly requesting multi-scenario pricing and risk-adjusted procurement strategies. In response, IPS has:
• Introduced flexible bidding structures that reflect potential tariff exposure.
• Engaged in frequent budget updates and contingency planning.
• Promoted early-stage collaboration to align risk sharing and timeline adjustments.
The uncertainty has also affected workforce planning, with IPS taking a measured approach to resource growth while ensuring readiness to mobilize as conditions clarify.
Global Supply Chain Reactions
International suppliers, especially those of cleanroom systems, stainless steel process vessels, and other GMP-compliant equipment—are also navigating this new landscape.
Some are:
• Repricing frequently to accommodate tariff risk.
• Reassessing U.S. distribution models to reduce financial exposure.
• Exploring North American manufacturing partnerships, although many remain cautious without definitive policy guidance.
These actions, while rational, have led to longer lead times and increased variability in equipment availability for U.S.-based projects.
Voices from the Global Supplier Community
European and Asian suppliers to the U.S. pharmaceutical sector report a marked shift in customer behavior.
A Managing Director at a German cleanroom technology firm commented:
“Our U.S. clients are increasingly hesitant to commit to long-term supply agreements. Pricing unpredictability is making financial planning difficult on both sides.”
Similarly, a Senior VP from a South Korean bioreactor manufacturer noted:
“We have seen projects redirected away from the U.S. due to tariff-related concerns. While we are considering local partnerships, we are waiting for greater clarity before investing.”
IPS: Supporting Clients Through Strategic Adaptation
To help clients navigate these uncertainties, IPS has implemented several proactive measures:
• Scenario-Based Procurement Planning: Offering multi-path sourcing options that account for variable tariff outcomes.
• Alternative Sourcing and Regionalization: Leveraging a global supplier network to ensure redundancy and minimize dependency on high-risk geographies.
• Long Lead Equipment (LLE): Identifying and securing long-lead items in advance, using risk-informed forecasting and procurement timing.
• Modular and Standardized Design: Utilizing flexible facility designs that enable equipment substitutions and dual sourcing.
Logistics and Freight: Strains and Adjustments
Freight forwarders and customs brokers are adapting to earlier and more concentrated order activity. Efforts to front-load equipment shipments ahead of possible tariff announcements have led to:
• Warehouse congestion
• Delivery schedule variability
• Additional coordination for validated and temperature-sensitive goods.
IPS continues to work closely with our logistics partners to ensure that regulatory compliance and on-time delivery remain on track despite increased complexity.
• Integrated Logistics Coordination: Partnering with freight providers to streamline inbound logistics and customs procedures.
• Transparent Cost Modeling: Providing clients with tariff-sensitive cost visibility for informed budgeting and real-time responsiveness.
These strategies reflect IPS’s commitment to delivering more than just infrastructure—we help clients remain agile and resilient in a changing global environment.
Voices from the Global Supplier Community
While the U.S. government has delayed implementation of some proposed tariffs, the lack of policy resolution has introduced planning challenges for the industry. IPS is advising clients to proceed with flexible, risk-adjusted plans rather than halt progress entirely.
Meanwhile, some firms are shifting toward longer-term supply chain adaptations:
• Reshoring investments, with renewed interest in locations like Puerto Rico.
• Supply diversification models, such as “China+1” and “U.S.+1.”
• Tiered manufacturing strategies that balance domestic and regional outsourcing.
These approaches are gaining momentum and may shape the post-tariff pharmaceutical construction landscape for years to come.
Conclusion: Managing Risk with Resilience
The pharmaceutical sector is no stranger to complexity. Today’s trade policy uncertainty is one of several variables influencing the pace and cost of facility construction.
By emphasizing flexibility, supply chain agility, and strong project planning, IPS is helping clients move forward confidently—even in the face of change. As the policy landscape evolves, continued collaboration and transparency will be key to maintaining progress across capital projects and global supply operations.
KEVIN R. BATCHE
Vice President of Procurement & Logistics at IPS-Integrated Project Services, LLC. With over two decades of experience in global sourcing and capital project execution in regulated industries, Kevin leads complex supply chain strategy for pharmaceutical and biotech manufacturing projects worldwide.
