With the United States stepping up protectionist measures, a state agency has pointed out that Korean pharmaceutical companies should strengthen their abilities to develop new drugs.

“Donald Trump’s trade policy, which the U.S. president has emphasized as a critical issue since he was a candidate, will exert significant influence, directly and indirectly, on the domestic healthcare industry depending on its level of implementation,” Korea Health Industry Development Institute_{한국보건산업진흥원}(KHIDI) said in a recent report.

Some people thought Trump would ease or readjust his extreme trade policy pledges after taking office, but the U.S. leader is defying such expectations by turning his commitments into action swiftly, the think tank said.

“Opportunities and threats coexist within the influence on the domestic healthcare industry that comes from the Trump administration’s trade policies, already announced or likely to be unveiled in the future,” the report said. “Government and business officials ought to come up with proper countermeasures to use the changes in the U.S. healthcare policy, corporate tax, and trade policy as opportunities.”

The institute went on to say, “In the longer term, pharmaceutical companies need to expand their export routes to the U.S. market through developing new drugs and exporting technologies.”

At the same time, the institute called for the need to rectify Korean drugmakers’ excessive dependence on the American market. “If Trump’s proposed trade policies become tangible, that will inevitably make an impact on the Korean economy highly dependent on exports to the U.S. and China,’ it said. “It is necessary to spread risks by diversifying export markets. Also, they will have to expand channels to cooperate and exchange views on trade issues with the U.S. from bilateral standpoints.”

However, the think tank cautioned against Korean pharmaceutical industry being mired in excessive jitters for now, as it is hard to predict in which direction the U.S. trade policy will head.

“The U.S. policies are not only uncertain but could end up a one-off phenomenon,” it said, warning Korean companies against hastily changing their export strategies.

The report stressed the need to strengthen capability for research and development and enhance countermeasures against changing trade environment and protectionism. “It is also imperative the nation create a climate for reinvigorating the industry and work out mid- and long-term strategy so that Korean businesses can maintain technological superiority in global markets,” it said.