AsianFin -- U.S. President Donald Trump on Tuesday warned that he would soon implement new sectoral tariffs.
Credit：China Central Television
Trump said on CNBC that his administration would announce tariffs on pharmaceuticals and semiconductors "within the next week or so." The president suggested the pharmaceutical tariffs would be gradually lifted and eventually to 250%.
"We'll be putting a initially small tariff on pharmaceuticals, but in one year — one and a half years, maximum — it's going to go to 150%. And then it’s going to go to 250%, because we want pharmaceuticals made in our country," Trump said in the CNBC interview.
As to levies on semiconductor, Trump didn’t offer details of the plan. “We’re going to be announcing on semiconductors and chips, which is a separate category, because we want them made in the United States,” he said Trump.
The threat of tariffs on pharmaceutical imports has been intensified since the Trump administration in April opened a so-called Section 232 investigation into how importing certain pharmaceutical products affects national security. The move was widely seen as a prelude to initiating tariffs on drugs.
Trump during a Cabinet meeting on July 8 disclosed steep tariffs on the pharmaceutical sector will be announced “very soon”, while he could offer the pharmaceutical manufacturers at least a year for transition of their production to the U.S. before implementing the tariffs up to 200%.
"We’re going to give people about a year, year and a half to come in, and after that they're going to be tariffed," Trump said in the meeting. "If they have to bring the pharmaceuticals into the country, … they're going to be tariffed at a very high rate — like 200%."
Trump a week later said he could impose impose tariffs on pharmaceuticals by August 1 and that levies on semiconductors could come soon as well.
“Probably at the end of the month, and we’re going to start off with a low tariff and give the pharmaceutical companies a year or so to build, and then we’re going to make it a very high tariff,” Trump said on July 15. He also said his timetable of the semiconductor tariffs was similar to the drug tariffs, and it was “less complicated” to impose levies on chips.
The White House last week said Trump had sent letters to 17 major pharmaceutical firms in the West outlining the steps they must take to lower the price of U.S. prescription drugs to “most favored nation” (MFN) levels by Sept. 29.
Companies to receive these letters include AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol-Myers Squibb, Eli Lilly, EMD Serono, Roche’s subsidiary Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron and Sanofi. Trump in the letter warned if these companies “refuse to step up,” the U.S. government will deploy every tool in its “arsenal to protect American families from continued abusive drug pricing practices,” without specifying the possible measures.
