Break ground by Wednesday or else: Trump imposes 100 per cent tariff on pharmaceuticals

2 hours ago 1

US President Donald Trump will slug branded pharmaceuticals with a 100 per cent tariff if manufacturers do not have an American manufacturing plant under construction by Wednesday, in a move that threatens Australia’s $2 billion of exports in the industry.

Trump announced this fresh round of tariffs on social media platform Truth Social, giving manufacturers a deadline of five days to start building plants to escape the extra costs.

US President Donald Trump announced 100 per cent tariffs on pharamceuticals via Truth Social.

“Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or “‘under construction’. There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!” the post read.

The proclamation that America would levy tariffs of 100 per cent on foreign pharmaceutical manufacturers is lower than previous threats to charge up to 250 per cent, but still punitive.

Just moments after the Australian sharemarket opened this morning domestic biotechnology giant CSL saw a 3.6 per cent drop in its share price. Government officials are scrambling to understand if the firm would be subject to the tariff as it specialises in blood-based therapies. CSL has been contacted for comment.

American pharmaceutical companies have already taken issue with the way the Australian government regulates drug prices through the Pharmaceutical Benefits Scheme, cutting potential profits for overseas producers. In March 2025 peak industry group Pharmaceutical Research and Manufacturers of America — representing giants Johnson & Johnson, Pfizer, and Eli Lilly among others — wrote directly to the Trump administration to complain about the Australian system.

However, the Albanese government has made clear it will not negotiate on the PBS to receive favourable trade outcomes with the Trump administration.

“The American industry may well want the US administration to try to encourage us to do less of that price reduction. That obviously taps into the profits that very profitable industry makes. But we’re simply not going to do it,” Health Minister Mark Butler said earlier this year.

“I want to make it absolutely clear it’s simply not up for negotiation from our point of view. It shouldn’t be a surprise, I guess, that Big Pharma want to sell their medicines at top dollar. But we want to make them cheaper... We see the PBS as a critical pillar to what we proudly think is one of the best healthcare systems on the planet. We’re simply not going to negotiate around it.”

The tariff would come into effect less than three weeks before Albanese and Trump are set to meet at the White House on October 20.

The offices of Health Minister Mark Butler and Trade Minister Don Farrell have been contacted for comment.

More to come.

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