Donald Trump has announced plans to impose tariffs as high as 200% on pharmaceuticals and 50% on copper, which could have significant implications for Australian exporters.
The US President has long been critical of American dependence on foreign-produced pharmaceuticals and copper, citing national security concerns and the need to promote domestic production.
Australian Pharmaceutical Exports to Take a Hit
Last year, Australia exported $2.2 billion worth of pharmaceuticals to the US, making it one of the country’s biggest exports to the US.
If Trump’s proposed tariffs go ahead, Australian pharmaceutical companies could be forced to pay significantly more to export their products to the US.
Copper Tariffs to Take Effect Soon
Trump has also announced plans to impose a 50% tariff on copper imports, which could take effect as early as next month.
Chile is likely to be the hardest hit by the copper tariffs, as it supplies the majority of the US’s copper imports.
Pharmaceutical Industry Lobbying for Tariffs
The US pharmaceutical industry has been lobbying the Trump administration to impose retaliatory tariffs on Australia due to the country’s Pharmaceutical Benefits Scheme, which forces drug companies to negotiate prices with the Australian government rather than individual buyers.
The industry argues that the scheme gives Australian drug companies an unfair advantage in the US market.
Uncertainty Around Final Decision
Despite Trump’s announcement, Commerce Secretary Howard Lutnick has suggested that a final decision on pharmaceutical tariffs has not been made.
Lutnick said that the Commerce Department’s investigation into pharmaceutical imports would be completed at the end of the month, and the President would then set his policies.
It remains to be seen how Trump’s proposed tariffs will affect Australian exporters, but one thing is certain – the move could have significant implications for the country’s economy.