Page 184 - CW E-Magazine (4-3-2025)

Special Report

Tariffs & pharma: What may be next?

he pharma industry weighs in  Tariffs imposed on United States PATRICIA VAN ARNUM
on the impact that US-imposed products;
Ttariffs would have on products,  Unfair, discriminatory, or extraterri- Editorial Director, (DCAT)
manufacturing, and supply chains, parti- torial taxes imposed by US trading trading partners. Upon completion of
cularly for generic drugs. With much partners on US businesses, workers, this evaluation, they are to provide a
uncertainty looming on how trade policy and consumers, including a value- report to the President detailing pro-
has and will evolve under a new US added tax; posed remedies in pursuit of reciprocal
Administration, what is the latest?  Costs to US businesses, workers, trade relations with each trading part-
and consumers arising from non- ner. In turn, the Director of the Offi ce
The latest turn: reciprocal tariffs tariff barriers or measures and unfair of Management and Budget is directed
The US position on trade, particu- or harmful acts, policies, or prac- to evaluate within 180 days the fi scal
larly tariffs, has seen several moves by tices, including subsidies, and bur- impacts on the federal government and
the new Administration under Presi- densome regulatory requirements the public and deliver that assessment
dent Donald Trump since taking offi ce on US businesses operating in other to the President.
on January 20, 2025. On February 13, countries;
the trade picture took another turn with  Policies and practices that cause Global reactions
President Trump signing a Presidential exchange rates to deviate from their The news of US-imposed reciprocal
Memorandum ordering the develop- market value, wage suppression; taxes was met with criticism from the
ment of plan to evaluate tariff levels and other policies that reduce US European Union (EU), which is one of
between the US and its trading partners as competitiveness; and the largest trading partners of the US,
well as to evaluate other trade barriers  Other practice that, in the judgment including for pharmaceuticals. “The
and practices by US trading partner. of the United States Trade Repre- European Commission views President
Called the “Fair and Reciprocal Plan,” sentative (USTR), in consultation Trump’s proposed “reciprocal” trade
which seeks to reduce the US trade with the Secretary of the Treasury, policy as a step in the wrong direc-
defi cit. the Secretary of Commerce, and tion,” said the European Commission
the Senior Counselor to the Presi- in a February 14, 2025, statement. “The
“This lack of reciprocity is one dent for Trade and Manufacturing, EU remains committed to an open and
source of America’s large and per- imposes any unfair limitation on predictable global trading system that
sistent annual trade defi cit in goods: market access or any structural benefi ts all partners. The EU maintains
closed markets abroad reduce U.S. impediment to fair competition with some of the lowest tariffs in the world
exports and open markets at home result the market economy of the US. and sees no justifi cation for increased
in signifi cant imports, both of which US tariffs on its exports…The EU will
undercut American competitiveness,” Following that evaluation, the US react fi rmly and immediately against
said the White House in a February 13, Secretary of Commerce and the USTR, unjustifi ed barriers to free and fair
2025 statement. “….Reciprocal tariffs in consultation with the US Secretary trade, including when tariffs are used to
will bring back fairness and prospe- of the Treasury, the US Secretary of challenge legal and non-discriminatory
rity..” Homeland Security, the Assistant to policies.”
the President for Economic Policy,
Under the plan, the US government the Senior Counselor to the President The US goods trade (exports plus
will fi rst evaluate and then work to coun- for Trade and Manufacturing, and the imports) with the EU totalled $975.9-bn
ter non-reciprocal trading arrangements heads of such other executive depart- in 2024, according to data from the
with trading partners by determining ments and agencies as the US Secre- Offi ce of the USTR. Goods exports
the equivalent of a reciprocal tariff tary of Commerce and the USTR deem totalled $370.2-bn; goods imports
with respect to each foreign trading relevant, are authorized to initiate totalled $605.8-bn. The US goods trade
partner. The approach would examine under respective legal authorities, all defi cit with the EU was $235.6-bn
non-reciprocal trade relationships necessary actions to investigate these in 2024.
with all US trading partners. It would practices from any non-reciprocal
include evaluating the following: trade arrangements adopted by any The US is the EU’s largest trading

184 Chemical Weekly March 4, 2025

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