U.S. President Donald Trump announced on Thursday that new tariffs would be imposed on patented medicines and their ingredients, according to the White House. The overall tariff rate will be 100 percent, but a lower rate of 15 percent applies to the European Union, Japan, South Korea, Switzerland, and Liechtenstein. The United Kingdom is also being considered for an exemption.
The tariffs are set to take effect within 120 days for large companies, while they will apply to smaller firms after 180 days. Trump says the measure is intended to increase domestic production of drugs within the United States. He bases the action on Section 232 of the Trade Expansion Act of 1962, which allows the president to restrict imports when the volume or circumstances of those imports threaten U.S. national security.
Last week the European Parliament approved a trade agreement with the United States, and it also passed an expanded waiver clause. Under that clause, the EU Commission could propose suspending all or some trade preferences if the United States imposes tariffs that exceed the agreed 15 percent ceiling or introduces new tariffs on EU goods.
