Trump announces new drug tariffs, and the EU clings to the trade deal

Barcelona/BrusselsDonald Trump isn't satisfied. After closing trade deals with several powers, the US president has surprised everyone with a new announcement to raise tariffs to 100% on all non-generic pharmaceuticals arriving in the United States starting October 1st. However, the European Commission hasn't taken note and, in a statement issued this Friday, recalled that the trade agreement it signed with Washington this summer establishes that import duties imposed by the White House can be a maximum of 15%.

As usual, Trump has communicated his intentions in a post on his social network, Truth Social, where he also explained the conditions for avoiding this new tax. "Starting October 1st, we will apply a 100% tariff on any branded or patented pharmaceutical product, unless a company is building its pharmaceutical manufacturing plant in the United States," the US leader stated.

These new tariffs are accompanied by lower tariffs on other products imported into the United States. Kitchen cabinets and bathroom vanities will have a 50% tariff starting October 1, upholstered furniture a 30% tariff, and heavy trucks a 25% tariff. "The reason for this is the massive flood of these products into the United States from other countries," Trump said in the Truth Social post, justifying these tariffs as part of his plan to reduce the federal deficit and stimulate domestic manufacturing. As Trump has done on other occasions, the 100% tariff on any branded or patented pharmaceutical product will apply to all imports, unless the company has begun construction of a manufacturing plant in the United States.

The EU is not taking any notice.

Trump's announcement comes just months after the trade agreement with Ursula von der Leyen's European Commission, which theoretically marked the end of the trade war between the two powers. In fact, the White House's position has been moving closer to that of Brussels on various issues, both trade-related and, for example, on the issue of Ukraine. In this context, EU sources downplay the US president's new threats, and Brussels is ignoring them.

"The trade agreement clearly sets a 15% cap on European Union exports to the United States. It represents a security guarantee that new tariffs will not be applied to European companies," the European Commission said in a statement. "The European Union is the only trading partner that has reached an agreement like this with the United States," it added.

In fact, the European Commission is confident it can lower the tariffs the United States applies to European products. The EU executive's statement asserts that "work continues to implement the commitments" agreed upon with Washington and that, in addition, "new areas for tariff exemptions and greater cooperation are being explored."

The sector wants "urgent" negotiations.

The European Federation of Pharmaceutical Industries and Associations (EFPIA) called on the European Union and the United States this Friday to negotiate "urgently" to avoid new tariffs on the sector. "The EU and the United States already have a trade agreement; discussions are urgently needed on how to avoid any tariffs on medicines that harm patients in the EU and the US," explained the director general of the association, Nathalie Moll, in statements to the Efe news agency.

The potential impact of the new tariffs on pharmaceutical products announced by Trump is not expected to be significant in the Catalan pharmaceutical sector because the large companies in the sector are either not highly exposed or, like Grifols, already have production plants in the United States. For example, Reig Jofre sells only between 1% and 2% of its production, slightly less than the dermatology pharmaceutical company Almirall, which has an exposure of 5% of all its sales.