Bitter Pill: Australian Leaders Scramble After Trump’s Pharma Tariff Announcement

Health Minister Mark Butler says the government is working with pharmaceutical companies on the fallout from the announcement.

CSL signage at the main entrance of it's offices and manufacturing plant in Parkville in Melbourne, Australia on Nov. 6, 2020. Asanka Ratnayake/Getty Images

Australian politicians have reacted to U.S. President Donald Trump’s directive to introduce 100 percent tariffs on pharmaceutical imports on Oct. 1.

Australia is a major exporter of blood and plasma products to America valued at A$2 billion last year.

“Starting October 1st, 2025, we will be imposing a 100 percent tariff on any branded or patented pharmaceutical product, unless a company is building their pharmaceutical manufacturing plant in America,” Trump wrote on Truth Social.

“‘Is building’ will be defined as ‘breaking ground’ and/or ‘under construction.’

“There will, therefore, be no tariff on these pharmaceutical products if construction has started.”

While Prime Minister Anthony Albanese has a face-to-face meeting planned with Trump for Oct. 20, the Coalition expressed concerned not enough had been done to negotiate the U.S. tariffs.

“The Coalition strongly opposes the imposition of tariffs on Australia by the U.S. and we stand ready to help the government in any way to help protect Australia’s pharmaceutical sector and the jobs of Australians,” Opposition Leader Sussan Ley said in a statement.

Australia’s Trade Minister Don Farrell spoke with U.S. trade representative Jamieson Greer on the sidelines of the recent ASEAN summit, but there has reportedly been no heads-up on the impending tariff decision.

A health worker holds a blood sample donated by a recovered COVID-19 coronavirus patient for plasma at a donation camp in Srinagar, India, on July 22, 2020. Tauseef Mustafa/AFP via Getty Images

Working Through Announcement, Says Minister

Health Minister Mark Butler says the government is working with the nation’s relevant pharmaceutical companies.

“We’re still working through the latest announcement from the president,” he told media.

“Obviously we have been aware of the administration’s intention to take action against pharmaceutical imports into America and we have been engaging with them, and making the case why we should continue with the tariff-free trade.”

Australia has a free-trade agreement with the U.S.

“We buy more pharmaceutical products from the U.S. by quite a distance than they buy from us,” Butler said.

“It is not in the American consumers’ interest to impose a higher price on the export from Australia to America.”

How Will Companies be Impacted?

The Australian Stock Exchange (ASX) reacted with shock to the announcement initially with millions wiped from the value of some of the nation’s largest pharmaceutical manufacturers.

Biotech manufacturer CSL slipped seven percent in the first minutes of trade, while radiology company Pro Medicus also fell seven percent.

Both companies prices seemed to have recovered not long after, but still registered a loss on the ASX200.

By late morning, CSL was sitting only 1.7 percent lower and remains optimistic about the overall impact.

“CSL will be actively monitoring further announcements from the administration in relation to the detail of the tariffs,” a CSL spokesperson said in a statement provided to AAP.

“As per previous market guidance, we do not expect any material impact from these tariffs.”