Trump proposes 100% tariff on prescription drugs in new trade plan

US President Signs Executive Order on Pharmaceutical Tariffs

United States President Donald Trump has signed an executive order that could impose tariffs of up to 100 percent on certain patented pharmaceuticals if companies fail to reach deals with his administration within the coming months.

The order, which was issued on Thursday, outlines a tiered system for tariffs on pharmaceuticals. Companies that have signed a “most favored nation” pricing deal and are actively building facilities in the US will be exempt from tariffs altogether. Those that don’t have a pricing deal but are building such projects in the US will face a 20 percent tariff, which will increase to 100 percent over four years.

The administration has already reached 17 pricing deals with major drugmakers, 13 of which have signed. The executive order applies to pharmaceuticals and pharmaceutical ingredients, citing national security concerns as the reason for the tariffs.

Companies have varying amounts of time to negotiate before the increased tariffs take effect. Larger companies will face a 120-day deadline, while smaller companies will have 180 days. No specific details on individual companies or drugs that may be affected by the tariffs were provided.

The European Union, Japan, Korea, and Switzerland will see a 15 percent US tariff on patented pharmaceuticals, matching previously agreed rates for most goods. The United Kingdom will face a 10 percent tariff, which will reduce to zero under future trade agreements.

Source: Al Jazeera