Pharmaceutical sector expects EU response to US import tariffs
US president Donald Trump announced a 100 percent import tariff on pharmaceutical products on Thursday night. This would directly violates existing trade agreements between Europe and the United States, according to the Belgian pharmaceutical federation essenscia.
Pharmaceutical products are currently exempt from tariffs. The recent EU-US trade agreement stipulates that potential tariffs on these products will be limited to 15 per cent, along with semiconductors, cars and a wide range of other goods.
Trump now seems to go against that deal with Thursday's post on Truth Social. “The announcement goes against the agreement between the EU and the US,” said essenscia spokesperson Gert Verreth. That is why the sector expects a response from the EU.
Financial setback
The tariffs could have major consequences for Belgium. The United States is the destination for a quarter of Belgian pharmaceutical exports, while pharmaceutical products represent 55 percent of the country’s total export value.
Other European countries would also be hit. For example, the key ingredient for Novo Nordisk's weight-loss and diabetes drugs Ozempic and Wegovy is made in Denmark, while the US imports key cancer treatments from Switzerland and Ireland.
The new tariff will not apply to companies building factories in the United States, Trump added. Companies like Merck, AstraZeneca and Johnson & Johnson have already announced billions of dollars worth of investments in the US after Trump came to power.
Essenscia says it is too early to quantify the impact of Trump's announcement. “The biggest impact today is uncertainty. That puts pressure on investment decisions in Europe, for example.”
PHOTO © JEFF PACHOUD / AFP
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