Labor is urging the White House to address Donald Trump’s proposal to impose 200% tariffs on medication imports to the US, a move that Jim Chalmers says poses significant concerns for the Australian economy.
Trump announced the punishing new border levies would come with a transition period of at least a year, following pressure from the US pharmaceutical industry regarding price controls on common drugs in countries like Australia.
Australia’s copper exports to the US are worth about $50m annually and account for less than 1% of total sales of the metal. In contrast, the exportation of approximately $2.5bn worth of pharmaceutical and healthcare products to the US each year is a significant component of Australia’s global exports.
Lobby groups have accused Australia’s Pharmaceutical Benefits Scheme of providing “unfair ‘freeloading'” to US exporters. The scheme keeps prices for nearly 1,000 commonly used medicines capped, with supply deals negotiated with drug companies.
The treasurer stated that the plan to impose tariffs on foreign pharmaceuticals and copper is “very concerning” and that the US market has a significant impact on Australia’s pharmaceutical industry.
The CFMEU national president, Tony Maher, highlighted that the labor movement would fight to maintain Australia’s Pharmsaide system, consistent with previous assurances that the scheme is not for negotiation.
The US Chamber of Commerce and the Pharmaceutical Research and Manufacturers of America have maintained that the system is discriminatory and a form of “socialised medicine.”
Chalmers criticized the growing global trade tensions caused by Trump’s unpredictable and expanding tariff regime, which he believes could undermine the planet’s post-Covid economic growth.
Trump has written letters to 14 US trading partners, including Japan and South Korea, warning them about the August 1 deadline for tariff implementation. Australia had not received a letter but expects one in the near future.
Trump insisted that the deadline would not change and that all payments would be due on August 1, 2025, with no extensions.
The US commerce secretary, Howard Lutnick, indicated that copper tariffs are likely to be implemented by the end of July or early August.
Source: https://www.theguardian.com/business/2025/jul/09/australian-government-urgently-seeking-more-detail-after-trump-flags-200-tariffs-on-foreign-pharmaceuticals
