Government scrambles to swerve Trump pharma tariffs
A race against time is underway to shield the UK pharmaceutical sector from potentially swinging Trump tariffs on imported drugs.
As it stands, there is an exemption for pharmaceuticals on the baseline 10 per cent tariffs for goods coming into the US.
However, President Trump has warned that there will be tariffs on imported pharma imports in the “not too distant future”.
The US is a crucial market for FTSE 100-listed pharma giants GSK and AstraZeneca – which have both been exempted so far.
For AstraZeneca, 43 per cent of 2024 revenues came from the American market.
Each company has major footholds in the US for vaccines, specialist medicines and for biotech research and development.
The Times has reported that Lord Peter Mandelson, UK Ambassador to the US, is “very focused” on securing an exemption for the UK.
According to The Times report, the government held a dinner for pharma executives on the night of Trump’s ‘Liberation Day’ announcements on 2 April.
Carve-out carnage
This fresh push to carve out favourable rules for British industry follows positive noises from VP JD Vance on Monday that a “great” trade deal could be on the cards as Trump “loves the UK”.
Politico reports that the UK government is hoping to secure “partial or full carve-outs” from tariffs on cars, steel and aluminium.
While Labour and the Conservatives both staunchly back a robust trade deal with the US, there is some opposition within the Commons. The Lib Dem leader Ed Davey is pushing for the government to hold a vote on any deal agreed with the Trump administration.
Trump’s team has promised a wide array of bespoke trading arrangements, with ambitious plans to secure 90 deals in 90 days.
The clock is rapidly running down on Trump’s 90-day pause tariff pause, with economists looking ahead nervously to what comes next.
And the unpaused tariffs alone – from auto levies to enormous duties on imports on China – could cut global trade by as much as 2.3 per cent by 2028, according to Oxford Economics.
If these numbers were to pan out, they would represent a pandemic-level reduction in global trade.