US to initially impose 'small tariff' on pharma imports, Trump says
WASHINGTON: President Donald Trump said on Tuesday (Aug 5) that the United States would initially impose a "small tariff" on pharmaceutical imports before raising it to 150 per cent within 18 months and eventually to 250 per cent, in a move aimed at boosting domestic production.
"In one year, one and a half years maximum, it's going to go to 150 per cent and then it's going to go to 250 per cent because we want pharmaceuticals made in our country," Trump told CNBC in an interview.
He did not specify the initial tariff rate, though he previously suggested in February that pharmaceutical and semiconductor tariffs would start at "25 per cent or higher", with substantial increases over the course of a year. Last month, he said tariffs on pharmaceutical imports could rise as high as 200 per cent.
CHIP TARIFFS PLANNED NEXT
Trump also said on Tuesday he plans to announce tariffs on semiconductors and chips in the “next week or so,” but did not provide further details.
The United States has been conducting a national security review of the pharmaceutical sector, and the industry has been bracing for the possibility of sector-specific tariffs. The administration has not announced when the results of that investigation will be released.
DRUGMAKERS BOOST US INVESTMENTS
Several pharmaceutical companies have pledged multibillion-dollar investments in US manufacturing as Trump continues to threaten import duties. AstraZeneca recently committed US$50 billion to expanding its operations in the United States.
PhRMA, the main lobbying group for the pharmaceutical industry, did not immediately respond to a request for comment.
A framework agreement between the United States and the European Union currently sets tariffs on pharmaceuticals and semiconductors at zero. However, if the US raises tariffs following its import review, they will be capped at 15 per cent.
