There has been speculation for weeks about what would happen to pharmaceuticals as part of Donald Trump’s massive tariff policy shift.
But drug products were unexpectedly excluded from the 20% taxes which will be imposed on exports from the EU to the US.
Tánaiste Simon Harris has suggested that the White House may well introduce measures on drug products in a separate announcement, possibly in the next few weeks.
But there have been some suggestions that the big pharma companies may have ‘got to’ Donald Trump and warned him of the potential downsides of hitting drug manufacturers with tariffs.
Those drawbacks include sudden problems with supply chains, the price of drugs quickly rising for consumers and the fact that it takes years to move production from one country to another.
Last night in a brief doorstep with the media Donald Trump suggested there will be measures on pharmaceuticals soon.
He said: “We are looking at pharma… as a separate category and we will be announcing that in the near future, not too distant future.”
Some other goods such as steel and aluminium were also excluded from the 20% tariffs because they have already been hit with additional taxes.
Mr Trump has said repeatedly that he wants to see drug manufacturing move back to the US from countries such as Ireland.
There is a perception that Ireland has captured an enormous amount of US pharmaceutical industry over recent decades.
However, there are 1,500 factories in the sector in the US compared to 90 here.
It is very possible Mr Trump will adopt non-tariff barriers, such as a technical regulation, which increases the cost of importing drugs in an effort to discourage pharmaceutical companies from expanding abroad.
At present, it is not yet clear exactly what measures if any will be imposed on drug companies exporting to the US.
Irish exports of pharmaceuticals to the US amount to €44 billion – which is a huge portion of exports to the US.
So whatever decision the White House takes will have huge ramifications for Ireland.
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