US President Donald Trump signed an executive order imposing a maximum 100% tariff on patented Australian pharmaceuticals.
The sweeping border levy aims to coerce foreign manufacturers into onshoring production and slashing prices for American consumers.
While the standard rate is set at 100%, companies that establish new US manufacturing facilities before 2028 will see the tariff reduced to 20%, while those that also commit to global-low "most-favoured nation" pricing may secure a total exemption.
The move comes exactly one year after Trump’s "Liberation Day" tariffs, bypassing recent Supreme Court restrictions by utilising alternative legal frameworks.
For Australia’s $2 billion pharmaceutical export industry, the impact is nuanced but potentially severe.
ASX-listed giant CSL (ASX:CSL) may dodge the heaviest blows; the order exempts plasma-derived therapies if they meet "urgent" health needs or if the originating country is pursuing a trade deal.
CSL’s recent US$1.5 billion expansion in Illinois further shields its primary revenue streams.
However, the outlook is grim for smaller biotech firms. EY partner Luke Branson warned the tax creates a "substantial barrier to commercialisation" that could cripple innovative Australian exporters.
Unlike the UK, which secured a zero-tariff deal, Australia’s passive negotiating stance has left its industry vulnerable.
Observers suggest the White House is using the levy as leverage to force the Albanese government into concessions regarding the Pharmaceutical Benefits Scheme, as the US continues to lobby against Australian drug-pricing practices.