Donald Trump has vowed to hit imports of pharmaceuticals with new tariffs in a major setback for one of Britain’s largest export industries.
Speaking in the Oval Office on Monday night, the US President said he would announce the charges on foreign drugs in the “not too distant future”.
It would mark a landmark moment for the industry, which has been exempt from tariffs for decades, following a World Trade Organisation agreement to ensure countries can get affordable access to medicines.
It is also a key export market for nations including the UK and Ireland. Pharmaceuticals is Britain’s second largest industry for exports to the US, after cars.
Mr Trump said: “We don’t make our own drugs, our own pharmaceuticals – we don’t make our own drugs any more.
“The drug companies are in Ireland, in lots of other places [like] China. And all I have to do is impose a tariff. The more, the faster they move here.”
Mr Trump also suggested he was exploring possible tariff exemptions for imported vehicles to give carmakers “a little bit of time” to move manufacturing to the US.
Pharmaceuticals were excluded from the first round of sweeping tariffs announced on Mr Trump’s “liberation day” earlier this month. However, he has hinted they will be subject to industry-specific charges, much like those levied on car and steel imports.
On Monday, he renewed his pledge, saying: “We’re going to be doing that. That’s going to be like we have on cars, you know a 25pc tariff on cars. We have a 25pc tariff on steel and aluminium. And that’s what that category fits right now.”
Last week, the chairman of British drugmaker AstraZeneca said medicines “should be exempted from any kind of tariffs because at the end this is just harming patients, health systems and restricting health equity”.
Around £7.2bn worth of medicines and pharmaceutical products was exported from the UK to the US in the 12 months to November, compared to around £4.5bn imported from the US to the UK.
The US imports around $213bn (£163bn) worth of pharmaceuticals every year and is reliant on countries such as India for supply of low-cost “generic” medicines.
Generics – mass-produced drugs that do not carry a patent – account for around 90pc of all US prescriptions, while India supplies almost half of all US generic medicines. Drug companies have warned that it would be more expensive to produce these medicines in the US, raising the risk of price increases for patients.
Mr Trump has claimed new tariffs will make drugmakers “come rushing back into our country because we are the big market”. He said earlier this month: “The advantages we have over everybody is that we’re the big market.”
The US President has been particularly critical of companies with manufacturing in low-tax jurisdictions including Ireland.
Last month, Mr Trump’s Commerce Secretary Howard Lutnick, said: “We’re gonna try to fix a whole bunch of these tax scams. Ireland is my favourite.”
Ireland’s enterprise minister swiftly rejected the characterisation: “We absolutely have no tax scams in this country.”
The threat of new tariffs risks having ripple effects for some of Britain’s largest listed companies. AstraZeneca makes around 42pc of its sales in the US, according to AJ Bell analysis of Bloomberg data, while GSK makes around 52pc. AstraZeneca has around 22pc of its manufacturing facilities there, while GSK has 26pc.
Mr Trump’s comments on Monday caused Wall Street to plunge briefly into negative territory as traders attempted to parse the financial hit that the move would make. The key stock market index, the S&P 500, is up by 0.9pc.
