Australia hit with 100 per cent levy on patented drugs
Updated ,first published
Washington: The Trump administration imposes a 100 percent tariff on imports of patented medicines; Australian-made medicines are subject to the highest possible rate, despite cuts for other countries.
The Albanian government and the opposition have expressed concerns about the impact on Australian pharmaceutical manufacturers and the US government’s move away from free trade.
But Australia’s largest biotech firm, CSL, could face a lower tariff rate or be exempt from new duties that do not apply to products derived from blood plasma in certain cases.
President Donald Trump signed an executive order Thursday afternoon (Washington time) enacting his long-signaled intention to impose tariffs on foreign drugs to revive U.S. production and lower prices for American consumers.
The standard rate is 100 percent, but many countries have received reductions as part of broader trade agreements; The European Union, Japan, South Korea and Switzerland all face a 15 percent tariff, and the United Kingdom is even lower.
“While we always work with our trading partners and close allies like Australia, Australia does not have a special drug tariff rate,” a White House official said in this piece.
Trump’s executive order reduces tariffs to 20 percent for companies that move production to the United States.
ASX-listed biotech giant CSL, which has facilities in the US, Australia and Europe, announced last year that it would expand its operations in the Americas by US$1.5 billion ($2.17 billion). Workers broke ground last month at the company’s manufacturing facility in Kankakee, Illinois; The expansion set will be completed by 2031.
A White House official said CSL must submit its plan to the U.S. Commerce Department, which has the authority to grant waivers.
The text of Trump’s executive order states that the tariff will be set to zero if plasma-derived treatments come from a country with an existing or upcoming trade agreement with the United States or meet an urgent US health need.
Australia has yet to sign a trade agreement with the Trump administration, but the US and Australia have a long-standing free trade agreement.
In a brief speech at the White House, Trump’s trade czar Jamieson Greer said the executive order focused on deals “already made” with companies that produce drugs in countries such as Australia, Austria and France. He didn’t take the questions.
CSL did not immediately respond to a request for comment.
It’s on Channel Seven sunrise Health Minister Mark Butler said Friday morning that the government would review Trump’s latest announcement. He was “fairly confident” that CSL would be exempt but had serious concerns for other exporters.
He also stated that Australia is not in favor of introducing the Pharmaceutical Benefits Programme, which the US administration has also expressed concerns about.
“There is no way we can negotiate the core elements of PBS that have served Australia so well for 80 years,” Butler said.
Opposition Leader Angus Taylor said the Coalition believed in free trade. “Of course, this is not welcome news, we do not want to see it,” he said. sunrise.
“We will work with the government to do everything we need to do.” [do] “either reverse it or provide exemptions for Australian exporters.”
Senior Trump administration officials speaking on a briefing call to reporters said large companies will have 120 days before the new tariffs go into effect, while smaller companies will have six months.
They said the new facilities should be completed by the end of Trump’s term in January 2029.
“Our expectation within these 120 days is that they will announce their re-shoring plans to reduce the [the tariffs] “Up to 20 percent,” a senior administration official said.
“We expect the lion’s share of the world’s patented medicines to be produced in America. It hasn’t been a secret, we’ve been talking about it non-stop for the last six months. Everyone knows it’s coming.”
These sectoral tariffs are imposed under Section 232 of the Trade Expansion Act, rather than under the president’s emergency powers, and so were not ruled unlawful by the Supreme Court’s February decision.
Trump also adjusted tariffs on steel, aluminum and copper, which are currently set at 50 percent and involve complex formulas for the steel component of various products.
If a product contains less than 15 percent steel, the additional tariff will now be set to zero, but other tariffs still apply, officials said. If the steel content in the product exceeds 15 percent, the steel tariff will be 25 percent on the total value of the product.
There are also moves to reduce what U.S. officials say is an attempt to “cheat the tariff process” by claiming products are worth less than their actual value.
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Michael Koziol is the North America correspondent for The Age and the Sydney Morning Herald. He is a former Sydney editor, deputy editor of the Sun-Herald and a federal political correspondent in Canberra.Connect with: X or email.
