Trump’s 200% Tariff Threat on Pharmaceuticals Sparks Global Economic Fears

The Australian government is urgently responding to U.S. President Donald Trump’s threat to impose 200% tariffs on foreign pharmaceutical imports, amid warnings that the sweeping measure could severely destabilize the global economy. The proposed tariffs, expected to be announced soon with a possible transition period of up to 18 months, have triggered concern in both political and economic circles.
President Trump cited unfair drug pricing practices in countries like Australia as justification, pointing to long-standing pharmaceutical benefits schemes that cap the prices of essential medicines. Australia’s Pharmaceutical Benefits Scheme (PBS), which regulates drug costs for nearly 1,000 common medicines, has been labeled by some U.S. industry lobbyists as “socialized medicine.”
Australian Treasurer Jim Chalmers called the development “very concerning,” noting the nation’s pharmaceutical industry is heavily reliant on the U.S. market, with exports totaling approximately $2.5 billion annually. He reiterated the government’s firm stance in defending the PBS and confirmed that discussions with the White House are ongoing.
Reserve Bank of Australia Deputy Governor Andrew Hauser warned that such aggressive trade policies could have Brexit-scale repercussions. Speaking at the Australian Conference of Economists, Hauser said the full economic impact may take years to materialize, but the current level of uncertainty is already shaking global investor confidence.
In addition to the pharmaceutical tariffs, Trump also announced a 50% tariff on copper imports, directly impacting Australia’s $50 million copper trade with the U.S. Industry leaders, including Minerals Council CEO Tania Constable, urged Australian exporters to diversify and strengthen international trade relationships in response to the rising geopolitical and economic instability.