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) that has long signaled his intention to impose tariffs on foreign drugs in an effort to bring U.S. manufacturing back onshore.
The standard rate is 100 percent, but many countries have received discounts as part of broader trade agreements. The European Union, Japan, South Korea and Switzerland are subject to a 15 percent tariff; The United Kingdom has an even lower tariff.
“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 the tariff to 20 percent for companies moving production to the United States and to zero if that country grants the United States “most preferred nation” status regarding drug pricing.
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 not signed a trade agreement with the Trump administration, but the two countries 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.
A CSL spokesman said the company was pleased that the Trump administration was developing treatments derived from plasma, which accounts for the vast majority of its trade to the United States.
“We are reviewing the materials released today and will continue to work with the administration to ensure access to plasma treatments,” he said.
A spokesman for Australian Trade Minister Don Farrell said the Albanian government was disappointed by the tariff decision and would strongly advocate for their removal.
It’s on Channel Seven sunrise On Friday morning, Health Minister Mark Butler said the government was “fairly confident” 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.”
The tariff announcement was timed to commemorate one year since so-called Independence Day, when Trump imposed sweeping “reciprocal” tariffs on nearly all U.S. trading partners. These tariffs were declared illegal by the US Supreme Court in February.
The drug tariffs are issued under Section 232 of the Trade Expansion Act, rather than under the president’s emergency powers, and are not covered by the Supreme Court’s 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.
