US President Donald Trump has threatened to impose tariffs of up to 250 per cent on pharmaceutical imports – specifically mentioning Ireland, while insisting the US wants pharmaceuticals made inside the country.
Mr Trump, who previously warned global drugmakers to reduce their domestic prices in the US, warned that he will be announcing tariffs for the pharmaceutical industry “within the next week or so.”
“It’s going to go to 250% because we want pharmaceuticals made in our country,” Mr Trump said in relation to the possible rate on Tuesday night.
Whilst just last week Trump had signed an executive order to impose a 15 per cent tariff rate on the majority of EU products, after meeting with Ursula von der Leyen in Scotland, he clarified that pharmaceutical tariffs will be treated separately.
In an interview on US television on Tuesday, Mr Trump pledged: “We’ll be putting an initially small tariff on pharmaceuticals but in one year, one-and-a-half years maximum it’s going to go to 150pc and then it’s going to go to 250pc.”
Trump said he was imposing tariffs on pharma imports to the United States “because we want pharmaceuticals made in our country.”
“They [pharmaceutical companies] make a fortune with pharmaceuticals, and they make in China and Ireland and everything else,” he added.
The American leader added that the tariffs on pharmaceutical imports would be “a separate class” to a series of tariff deals confirmed in recent weeks, clarifying: “These are excluded class, as I call them […] like steel, aluminium, etc.”
“We’re going to be announcing on semiconductors and chips, which is a separate category,” the president said.
The pharmaceutical sector is a huge part of the Irish economy. Such a move could be a damaging blow for the Irish economy with approximately 50,000 people directly employed in the sector through more than 90 pharmaceutical companies. Approximately 30,000 of those workers are employed by US companies at plants throughout Ireland, and it is estimated that a further 50,000 jobs are supported indirectly by the pharma sector – bringing the total employment impact of the sector to around 80,000 jobs.
The midlands and the west are areas with significant employment, whilst most of the big firms have bases in Dublin. In Cork, companies including Pfizer, Merck, Johnson and Johnson, Lilly and AbbVie all have major operations.
Over €58bn of Ireland’s €72.6bn in US exports last year came from pharmaceuticals, the risk is significant, with the industry central to the State’s foreign direct investment model.
Such a step could also deal a huge blow to the UK, where AstraZeneca and GSK are counted among two of its largest companies, with an estimated 73,000 people employed in the sector overall in Britain.
Whilst both Ireland and Britain have signed a trade agreement with the US (Ireland, as part of the EU, has agreed a trade deal with the United States that includes a 15% tariff on most EU exports to the US) the pharmaceutical tariffs are expected to fall outside the scope of the agreement.
Speaking after the framework regarding 15 per cent tariffs for most goods was announced, Tánaiste Simon Harris said: “Whilst the agreement between the EU and the US is welcome, we know that the imposition of any tariffs will have implications and that now is the time to intensify efforts to find and secure more markets for Irish businesses and Irish jobs.”