US President Donald Trump has said he will announce a "major tariff" on pharmaceutical imports "very shortly" after imports of medicinal drugs and similar products avoided being taxed last week.
Speaking at an event at the National Republic Congressional Committee last night, Trump said the proposed tariff would incentivise drug companies to move their operations to the US.
Ireland is the European base for US pharma giants such as AbbVie, Pfizer, Lilly, MSD, and Bristol Myers Squibb, and the industry employs around 45,000 people here.
Figures from the CSO show Ireland exported €44.4 billion worth of medicinal and pharmaceutical products to the US last year.
Pharmaceuticals were exempt from the sweeping tariffs on US imports announced by Trump last week that come into effect today, April 9.
Goods being imported to the US from the EU will be subject to a 20% tariff while Chinese goods will be taxed at 104%, up from the 34% announced by Trump last week after Beijing backed retaliatory tariffs.
Later today, the EU is expected to approve €21 billion in tariffs on US products in retaliation for the 25% tariff on European steel and aluminum exports imposed by Trump last month.
Stocks in Europe and Asia continued their slide today following news of the increased tariff on Chinese goods.
The FTSE 100 in London declined 2.2% in opening trade, and the CAC in Paris (-2.8%) and DAX (-2.4%) fell similarly.
The ISEQ 20 in Dublin dropped 3% at opening this morning, with AIB and Bank of Ireland seeing big losses.
Tokyo's Nikkei index closed with losses of 3.9%, while Hong Kong's Hang Seng fell 3.1%, and the MSCI's broadest index of Asia-Pacific shares outside Japan decreased 1.7%.
On Wednesday, the S&P 500 suffered one of its largest losses for 50 years, finishing down 4.1%. Over the past four days, the index has lost $5.8 billion in stock market value.
"These are tailored, highly tailored deals," Mr. Trump said at a White House event, where he signed executive orders aimed at boosting coal production.
"We've had talks with many, many countries, over 70, they all want to come in. Our problem is, we can't see that many that fast."
During his speech to Republican politicians, Trump said he would soon announce "major" tariffs on pharmaceutical imports, arguing the duties would push drug companies to move manufacturing operations to the US.
"We have to do... we're going to tariff our pharmaceuticals," he said.
"And once we do that, they're going to come rushing back into our country because we're the big market, the advantage we have over everybody is that we're the big market.
"So we're going to be announcing very shortly a major tariff on pharmaceuticals."
European pharmaceutical companies warned European Commission president Ursula von der Leyen that US tariffs would accelerate the industry's shift away from Europe to the US.
The European Federation of Pharmaceutical Industries and Associations (EFPIA), a lobby group representing 33 of the largest firms, 28 of which have bases in Ireland, called on von der Leyen to push for “rapid and radical action” to mitigate the “risk of exodus” to the US.
Without such measures, they warned, pharmaceutical research, development and manufacturing is “increasingly likely to be directed towards the US."
*This article was originally published on BusinessPlus.ie.
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