Trump says pharmaceutical tariffs could reach 200%

US President Donald Trump on Tuesday said he plans to announce tariffs on imported pharmaceuticals which could reach 200 per cent but he would give drugmakers about one year “to get their act together.”

“We’re going to give people about a year, a year and a half to come in and, after that, they’re going to be tariffed,” Trump told reporters, speaking at a meeting of his cabinet at the White House where he also said he planned tariffs on semiconductor imports.

“If they have to bring the pharmaceuticals into the country ... 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,” he said.

“We’re going to be announcing pharmaceuticals, chips and various couple of other things - you know, big ones,” Trump told reporters, while announcing a new tariff rate for copper. He did not offer specifics on when the other announcements would come.

The Trump administration launched an investigation into the pharmaceutical industry in April as part of a bid to impose tariffs on the grounds that extensive reliance on foreign production of medicine is a national security threat.

Trump has argued that the US needs more drug manufacturing so it does not have to rely on other countries for medicines.

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The Commerce Department, which is conducting the investigation, has yet to issue a report.

Details on pharmaceutical tariffs “will come at the end of the month,” Commerce Secretary Howard Lutnick told CNBC after the cabinet meeting.

“With pharmaceuticals and semiconductors, those studies are being completed at the end of the month, and so the president will then set his policies then, and I’m going to let him wait to decide how he’s going to do it,” Lutnick said.

Drugmakers have argued that tariffs could increase the chance of shortages and reduce access for patients. They have lobbied Trump to phase in tariffs in hopes of reducing their impact and granting them extra time to shift manufacturing.

The companies have global manufacturing footprints, and moving more production to the US involves a major commitment of resources and could take years, they argue.

“Every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or the development of future treatments and cures for patients,” Alex Schriver, spokesman for industry group PhRMA, said in a statement.

The market reaction to Trump’s comments was muted.

Shares of top US drugmakers Pfizer, Merck, Eli Lilly, Bristol Myers and Johnson & Johnson all dipped during the cabinet meeting, but recovered much of that drop shortly afterward. They closed up between 0.3 per cent and 1.4 per cent on Thursday.