U.S. President Donald Trump has announced a new 100% tariff on imported branded pharmaceuticals, which could significantly impact Australia's $2 billion pharmaceutical export industry. The tariff will take effect on October 1, 2025, unless manufacturers have begun construction on a U.S. manufacturing plant by this Wednesday. Trump made the announcement on the social media platform Truth Social, stating, "Starting October 1st, 2025, we will be imposing a 100% Tariff on any branded or patented Pharmaceutical Product, unless a Company IS BUILDING their Pharmaceutical Manufacturing Plant in America. ‘IS BUILDING’ will be defined as, ‘breaking ground’ and/or ‘under construction.’"

This new tariff is a reduction from earlier threats of up to 250%, but it remains a significant financial burden for foreign pharmaceutical companies. Following the announcement, shares of Australian biotechnology firm CSL dropped by 3.6% as investors reacted to the potential impact of the tariff. Government officials are currently assessing whether CSL, which specializes in blood-based therapies, will be affected by the new duties.

American pharmaceutical companies have previously expressed concerns about Australia's Pharmaceutical Benefits Scheme (PBS), which regulates drug prices and limits profits for overseas producers. In March 2025, the Pharmaceutical Research and Manufacturers of America, representing major companies like Johnson & Johnson and Pfizer, wrote to the Trump administration to voice their complaints about the PBS.

However, the Albanese government in Australia has stated it will not negotiate the PBS in exchange for favorable trade terms with the U.S. Health Minister Mark Butler emphasized, "I want to make it absolutely clear it’s simply not up for negotiation from our point of view. It shouldn’t be a surprise, I guess, that Big Pharma want to sell their medicines at top dollar. But we want to make them cheaper... We see the PBS as a critical pillar to what we proudly think is one of the best healthcare systems on the planet. We’re simply not going to negotiate around it."

The timing of the tariff announcement is notable, as it comes just weeks before Albanese and Trump are scheduled to meet at the White House on October 20. The offices of Health Minister Mark Butler and Trade Minister Don Farrell have been contacted for further comments regarding the situation.

In addition to pharmaceuticals, Trump has also proposed tariffs on other imported goods, including 25% on heavy-duty trucks and 50% on kitchen cabinets. These tariffs are part of a broader strategy to protect U.S. manufacturers from what Trump describes as "unfair outside competition." The implications of these tariffs could extend beyond pharmaceuticals, affecting various sectors and international trade relations.