Trump says US to announce pharmaceutical tariffs soon
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The news: US President Donald Trump has said the US will soon announce a major tariff on pharmaceutical imports.
The numbers: The US imposed a baseline tariff of 10% on Australia as part of its sweeping tariffs announced last week but deferred levies on pharmaceuticals and semiconductors globally.
The context: Speaking at a National Republican Congressional Committee event, Trump said the tariff will incentivise drug companies to move their operations to the US.
“We’re going to tariff our pharmaceuticals and once we do that they’re going to come rushing back into our country because we’re the big market,” Trump said.
“So we’re going to be announcing very shortly a major tariff on pharmaceuticals and when they hear that, they will leave China, they will leave other places because they have. Most of their product is sold here and they’re going to be opening up their plants all over our country.”
US companies have long criticised Australia’s Pharmaceutical Benefits Scheme (PBS) because drug prices are capped under the national subsidised medicine system. American pharmaceutical giants, represented by the Pharmaceutical Research and Manufacturers of America industry lobby group (PHrMA), wrote to the Trump administration's Trade Representative in March, blaming slow approval processes and calling for an end to Australia's "damaging pricing policies".
Australia exported $US1.1 billion worth of pharma products to the US in 2023, representing 40% of its total pharmaceutical exports of about USD2.6 billion.
The sources: Reuters, ABC, The Wall Street Journal
