On Friday, the European Union (EU) and Japan expressed confidence that they had successfully secured limits on the US tariffs on pharmaceuticals, which President Donald Trump announced would be imposed next week at a 100% rate.
The European Commission referred to a joint statement agreed with the US following its end-July trade deal, which states that the tariff for pharmaceuticals, semiconductors and lumber would not exceed 15%.
“This clear all-inclusive 15% tariff ceiling for EU exports represents an insurance policy that no higher tariffs will emerge for European economic operators,” a Commission spokesperson said.
Cautious Optimism That Cap Will Apply
European Trade Commissioner Maros Sefcovic, speaking in Hanoi, said he expected the commitment to be respected, noting that Washington had followed through in lowering car tariffs.
Japan also referred to its joint statement with Washington, which said that US tariff rates on Japanese semiconductors and pharmaceuticals would not exceed those applied to others such as the EU.
A lobbyist for a major drugmaker with large European exports to the United States said Trump’s threat of 100% tariffs on branded drug imports was worrying, but the industry hoped the 15% rate agreed under the US-EU trade deal would apply.
“Nothing is clear yet but we hope the EU-US deal stands,” the lobbyist said.
The EU’s pharma lobby group, EFPIA, said it was working on the assumption that the EU-US deal applied and that it was still pushing on exemptions for medicines.
Europe and the US have tightly linked medicine supply chains, with Ireland, Switzerland and Germany among top exporters.
EU medicinal and pharmaceutical exports to the United States totalled 119.7 billion euros ($134.0 billion) in 2024, according to EU statistics agency Eurostat, some 37% worth from Ireland.
Trump’s Truth Social Bomb
In a post on Truth Social on Thursday, Trump announced a fresh round of tariffs that also covered trucks at 25% and furniture at 30-50%.
Trump said the pharmaceutical tariff of 100% would apply to branded or patented drugs unless a given pharmaceutical company was building a manufacturing plant in the United States.
A source at a large European drugmaker said the company was quietly optimistic it would avoid 100% tariffs given the major US investments it has pledged this year.
Novo Nordisk CEO Mike Doustdar said on Friday it was uncertain how the 100% tariff decision aligned with the EU-US trade deal. The Danish maker of weight-loss drug Wegovy and diabetes treatment Ozempic said it exported more active pharmaceutical ingredients from the US than it imported.
Swiss companies Roche and Novartis flagged on Friday that they did not expect to be hit by pharmaceutical tariffs because they are in the process of building new US sites and investing there.
Drugmakers are also scrambling to cut cash prices for some US drugs after Trump’s demand that they do so ahead of a September 29 deadline, with tariffs threatened if he is not satisfied.
(With inputs from Reuters)
