Eye-watering price hike waiting for millions of Aussies as Trump threatens 200 per cent tariff on essential necessity nobody can live without
Aussies could be left hundreds of dollars out-of-pocket as Donald Trump threatens 200 per cent tariffs on Australian pharmaceutical exports to the US unless a major medicinal subsidy scheme is scrapped.
Trump’s 90-day pause on tariffs was due to expire on July 9 but is now being extended to August 1.
After lobbying from American drug companies, Trump has flagged huge import taxes on Australian pharmaceutical exports unless they move production to the United States.
‘We’re going to give (drug manufacturers) about a year, a year and a half to come in, and after that, they’re going to be tariffed,’ he said.
‘They’re going to be tariffed at a very, very high rate, like 200 per cent. We’ll give them a certain period of time to get their act together.’
American drug companies have long had an issue with Australia’s Pharmaceutical Benefits Scheme, which they argue limits how much they can charge for medicines in Australia.
The PBS reduces the prices Australian retail chemists pay to wholesalers for medicines, enabling the sick and the elderly to buy prescription medicines cheaply.
Neither side of politics in Australia would likely agree to scrap the Pharmaceutical Benefits Scheme, first established in 1948, to escape the prospect of punitive tariffs.
Donald Trump is now threatening 200 per cent tariffs on Australian pharmaceutical exports to the United States unless a major medicinal subsidy scheme is scrapped
Labor was re-elected in a landslide with a plan to cap PBS-subsidised medicines at $25 a script, down from $31.60 now.
Abandoning government subsidies could leave patients suffering from chronic health conditions or cancer hundreds of dollars out-of-pocket.
Multiple Sclerosis drug Fingolimod comes with a $1,031 subsidy and is available to concession cardholders for just $7.70.
Leukaemia drug Imatinib comes with a $631 subsidy while prostate cancer drug Goserelin has a $381 subsidy.
Kevin Hogan, the Coalition’s shadow trade minister, said the Opposition would not support any call to tinker with the PBS to avoid the tariffs.
‘National interest and sovereignty first,’ he told Daily Mail Australia.
‘We did the free trade agreement with the US when we were in government way back.
‘We had the Pharmaceutical Benefits Scheme protected within that free trade agreement.’
Neither side of politics in Australia would agree to scrapping the Pharmaceutical Benefits Scheme, first established in 1953, to escape the prospect of punitive tariffs
Australia’s PBS was a sore point in 2004 when the US, under then-president George W. Bush, negotiated and signed the Australia-United States Free Trade Agreement during John Howard’s time as prime minister.
Pharmaceutical products were Australia’s third biggest export last year after meat and gold, with the $2.1billion worth of medicines sold to the US market making up 8.6 per cent of Australian exports sent there.
Tariffs on those Australian exports to the US would be particularly damaging, given they are much more lucrative than steel and aluminium exports, now subject to a 50 per cent tariff.
Hogan was critical of Prime Minister Anthony Albanese for failing to secure an in-person meeting with Trump – like his UK Labour counterpart Keir Starmer – to secure less punitive tariffs.
‘Obviously, at the moment, it doesn’t appear to be a personal relationship at all which is disappointing,’ he said.
‘We don’t agree with Trump on a number of issues and that’s okay to disagree with friends and allies.
‘There’s a real question mark that has to be asked over the Prime Minister and his unwillingness or inability to get a one-on-one meeting with the US President.’
Starmer did a deal to get steel and aluminium tariffs reduced from 50 per cent to 25 per cent but is hoping for zero.
Kevin Hogan, the Coalition’s shadow trade minister, said the Opposition would not support any call to tinker with the PBS to avoid the tariffs (he is pictured left with Nationals leader David Littleproud, centre, and Senate leader Bridget McKenzie)
Hogan said this marked a huge contrast with Australia.
‘The cost right now is being worn by our steel and aluminium industry and they’re workers,’ Hogan said.
The Reserve Bank of Australia’s deputy governor Andrew Hauser said Trump’s unpredictable tariffs were concerning.
‘The challenge with what’s happening at the moment is firstly about the level effect, if you like, but secondly the enormous amount of uncertainty – indeed, many would say unpredictability in the global economy,’ he said.
‘We’re all watching this like hawks – I say we, I mean globally, central banks – the situation’s evolving very rapidly.’
