US President Donald Trump has indicated that he will likely implement tariffs on pharmaceutical imports starting at the end of July. During a recent press briefing, he stated that the initial tariff rates will be relatively low, allowing companies a year to establish domestic manufacturing facilities before facing increased import taxes. He suggested that these changes could be enacted “at the end of the month.”
Currently, Australian exports to the US already incur a 10 per cent tariff, which Trump has announced may escalate to 15 or even 20 per cent by August 1. However, it seems that pharmaceutical products are now under particular scrutiny, with Trump previously hinting at the possibility of tariffs on drugs reaching as high as 200 per cent. Such steep tariffs would significantly increase the costs of Australian medications for consumers in the US.
Pharmaceutical exports represent Australia’s second-largest trade category with the US, right after beef, amounting to over $1.6 billion annually, as reported by the Observatory of Economic Complexity. Australian Treasurer Jim Chalmers has acknowledged that the pharmaceutical sector is particularly vulnerable to any imposed tariffs from the US.
Trump has expressed that one of the primary objectives of introducing these tariffs is to encourage the revival of manufacturing in the US. As the situation unfolds, the potential ramifications for the Australian pharmaceutical industry and its exports to the US will be closely monitored.