U.S. President Donald Trump has announced a 100% tariff on pharmaceutical imports.
In a post to social media, Trump said the tariff would have an exemption for foreign companies that operate manufacturing facilities in the U.S.
The new tax will take effect on 1 October.
Australia’s pharmaceutical and medicine exports to the U.S. were worth $2 billion in 2024.
Tariffs
A tariff is a tax on imports. It’s applied to foreign-made goods brought into another country and paid for by the importer.
Since returning to the White House in January, Trump has implemented a suite of tariffs.
In April, he imposed a “baseline” 10% tariff on all countries, including Australia, and levied higher rates on certain countries.
Trump also imposed 50% tariffs on steel and aluminium imports.
Announcement
In a post to his social media platform Truth Social, Trump announced a 100% tariff on “any branded or patented pharmaceutical product” imported into the U.S.
The levy will not apply to companies that already operate manufacturing plants in the U.S, or have facilities “under construction”.
The move is part of a broader package of tariffs, set to take effect on the same day, which Trump says are aimed at protecting America’s manufacturing industries.
Australia
Medicines and pharmaceuticals rank among Australia’s top exports to the U.S.
In 2024, these exports were worth $2.05 billion, according to the Australian Bureau of Statistics, and represented about 40% of Australia’s total medicinal exports.
The tariffs could effectively act as a trade embargo, as the cost of doing business in the U.S. would increase significantly.
Your contribution ensures The Daily Aus can continue doing the work you love.
I want to give $10 monthly to help TDA keep doing the news.
Your details:
PBS
The announcement of the tariffs follows a complaint filed with the U.S’ top trade official by the Pharmaceutical Research and Manufacturers of America, a lobby group.
The Pharmaceutical Benefits Scheme (PBS) is a list of Government-subsidised medicines. The maximum cost of medicines on the PBS is currently capped at $31.60, and will come down to $25 next year.
The lobbyists said the PBS “undermines American competitiveness, jobs and exports,” saying it has “egregious and discriminatory pricing policies”.
Politics
The Australian Government said it is seeking further details on the tariffs.
Federal Health Minister Mark Butler said he is “determined to do everything to protect the PBS”.
“None of these latest announcements for the U.S. administration make a jot of difference to our determination to protect the PBS,” Butler said.
In a statement, the Coalition said the tariff would put one of Australia’s most “critical” trade sectors at risk.
Senior Coalition MPs said they were prepared to “help the Government in any way” to protect the pharmaceutical industry.
The Opposition also criticised the Prime Minister, saying he had failed to establish a “strong direct relationship” with Trump.
Albanese is expected to formally meet with Trump for the first time next month. The two met briefly on the sidelines of the United Nations General Assembly this week.
Manufacturers
CSL is one of Australia’s largest pharmaceutical companies, and a major exporter of plasma products to the U.S.
It said it does not expect any “material impact” from the new tariffs.
The manufacturer said it anticipates meeting the criteria for an exemption, noting it has “a very significant United States manufacturing footprint.”
