Labor is making pressing representations to the White Home about Donald Trump’s risk to impose 200% tariffs on drug imports to the US, an announcement Jim Chalmers says could be very regarding for the Australian economic system.
The US president mentioned on Wednesday that the punishing new border levies would include a transition interval that would final extra at the very least a 12 months, after sustained stress from the US pharmaceutical business over worth controls on frequent medicine in nations like Australia.
“We’ll be asserting one thing very quickly on prescribed drugs,” Trump mentioned.
“We’re going to provide individuals a few 12 months, 12 months and a half to come back in, and after that they’re gonna be tariffed in the event that they must carry the prescribed drugs into the nation at a really excessive fee, like 200%.”
Trump, who this week delayed the lifting of a pause on his so-called “retaliatory tariffs” in opposition to greater than 100 nations till 1 August, additionally introduced a plan to hit copper imports into the US with a 50% tariff.
Australia’s copper exports to the US are value about $50m yearly and make up lower than 1% of complete gross sales of the steel.
However Australia exports about $2.5bn in pharmaceutical (primarily vaccines and blood merchandise) in addition to healthcare merchandise to the US annually – a share of about 40% of medicines exports throughout the globe yearly.
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This week Guardian Australia reported among the most influential foyer teams in Washington have been pushing the US to retaliate in opposition to Australia’s remedy of US exporters beneath the $18bn pharmaceutical advantages scheme, pointing to drug approvals and home manufacturing incentives as proof of unfair “freeloading”.
The PBS retains costs for practically 1,000 generally used medicines capped, with provide offers negotiated with drug corporations to make sure entry to life-saving medicine.
The treasurer mentioned the plan to impose tariffs on international prescribed drugs and copper have been “very regarding developments”.
“Our prescribed drugs business is way more uncovered to the US market, and that’s why we’re searching for, urgently searching for, some extra element on what’s been introduced,” Chalmers informed ABC radio.
“However I need to make it actually clear as soon as once more, as now we have on a lot of events earlier than, our pharmaceutical advantages scheme shouldn’t be one thing that [we are] keen to commerce away.”
Foyer teams together with the US Chamber of Commerce and the Pharmaceutical Analysis and Producers of America have informed the US commerce consultant, Jamieson Greer, that the system is discriminatory and “socialised drugs”.
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Chalmers mentioned rising world commerce tensions linked to Trump’s unpredictable and increasing tariff regime have been a “substantial concern” to Australia.
“It does pose a danger to the progress that the world has been making in our economies after Covid,” he mentioned.
“We’ve made it actually clear on a lot of events, these tariffs are unhealthy for Australia. They’re unhealthy for the US. They’re unhealthy for the worldwide economic system.
“These developments, they’re generally unpredictable. There’s been a component of volatility and uncertainty injected into the worldwide economic system.”
Trump this week despatched letters of demand to 14 US buying and selling companions, together with Japan and South Korea, warning them of the 1 August deadline.
Australia had not acquired a letter as of Wednesday, although Trump flagged then that further letters could be despatched within the subsequent “quick time period”.
“As per letters despatched to varied nations yesterday, along with letters that will likely be despatched at present, tomorrow, and for the following quick time period, TARIFFS WILL START BEING PAID ON AUGUST 1, 2025,” he mentioned.
“There was no change to this date, and there will likely be no change. In different phrases, all cash will likely be due and payable beginning AUGUST 1, 2025 – No extensions will likely be granted. Thanks on your consideration to this matter!”
The US commerce secretary, Howard Lutnick, informed CNBC he anticipated the copper tariffs to be put into place as quickly as the top of July or someday in early August.
