6 days ago
EU pushing to cap future tariffs on pharma in US deal
The
European Union
is pushing for any future
tariffs
on pharmaceutical products sold to the United States to be capped at a blanket 15 per cent rate, in ongoing trade negotiations with
US President Donald Trump's administration.
Pharmaceutical products have emerged as one potential sticking point in intense EU-US negotiations to land a tariff agreement in the next eight days.
The latest outline of a possible deal – the shape of which has changed several times over recent weeks – would see the EU agree to accept tariffs of 15 per cent being charged on most goods sold to the US.
The European Commission, the EU's executive arm negotiating for the 27-state bloc, is pushing to have tariffs on pharmaceutical products and cars capped at that level.
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Negotiators for the Trump administration want possible trade levies on pharmaceuticals to be dealt with separately, leaving the door open to the sector facing significantly higher import duties.
The fate of pharmaceuticals in any tariff deal has been a key concern of the Government. The industry accounts for the vast majority of the Republic's huge flow of trade across the Atlantic, due to the large number of US pharma giants with manufacturing plants in Ireland.
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To date the sector has not been hit with any tariffs, which are effectively taxes on imports. Though Mr Trump has repeatedly said hefty levies are coming, as a way to force drugmakers to relocate manufacturing capacity and jobs to the US.
There is some optimism inside the commission that a EU-US deal could be done in the coming days. However, sources in both Dublin and Brussels stressed the unpredictable nature of the talks, which could equally run right up to an August 1st deadline set by Mr Trump, or beyond.
Most European businesses have faced US tariffs of 10 per cent since early April, with Mr Trump levelling higher rates of 25 per cent on imports of cars, and a 50 per cent levy on steel and aluminium.
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The outline of a potential deal being hammered out could see tariffs on EU-made cars brought down to 15 per cent, in what would be a bit of a reprieve for Germany's large automobile industry.
It is understood existing tariffs on steel may be dealt with separately, possibly through some workaround such as a quota system, to lessen the impact of the US import duties.
Several sources briefed on the ongoing negotiations said a 15 per cent tariff on most EU products sold to the US appeared largely settled between the two sides.
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Much of the recent focus of talks between officials has been on specific sectors, such as pharmaceuticals, cars, steel, and semiconductors. Any negotiated agreement would be subject to a final sign off by Mr Trump.
Some European industries would be exempt from US tariffs, with aircraft, spirits and some medical devices believed to be in the frame to be spared, according to several sources.
Both sides were close to a deal earlier this month, before Mr Trump instead threatened to triple existing tariffs charged on EU trade to 30 per cent from August 1st.
European governments have been keen to agree some type of bare bones trade agreement with the US, to avoid the prospect of those higher tariffs kicking in.
