Break ground by Wednesday or else: Trump imposes 100 per cent tariff on pharmaceuticals

US President Donald Trump will slug branded pharmaceuticals with a 100 per cent tariff if manufacturers do not have an American manufacturing plant under construction by Wednesday, sending Australian authorities scrambling to assess the implications for $2 billion worth of exports.

Trump announced this fresh round of tariffs on social media platform Truth Social on Friday, giving manufacturers a deadline of five days to start building plants to escape the extra costs.

“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’. There will, therefore, be no Tariff on these Pharmaceutical Products if construction has started. Thank you for your attention to this matter!” the post read.

The proclamation that America would levy tariffs of 100 per cent on foreign pharmaceutical manufacturers is lower than previous threats to charge up to 250 per cent, but still punitive.

Just moments after the Australian sharemarket opened on Friday, shares in domestic biotechnology giant CSL dropped 3.6 per cent. A spokesperson for CSL – which accounts for a large portion of Australia’s pharmaceutical exports to the US – did not expect “any material impact” from the tariffs as the company has “a very significant United States manufacturing footprint”.

“We are already expanding our US capabilities to meet the growing demand for our therapies, and we have announced further expansion of significant, new capital investments during the next five years,” the spokesperson said.

American pharmaceutical companies have already taken issue with the way the Australian government regulates drug prices through the Pharmaceutical Benefits Scheme, cutting the potential profits of overseas producers. In March 2025, peak industry group Pharmaceutical Research and Manufacturers of America – representing giants Johnson & Johnson, Pfizer, and Eli Lilly among others – wrote to the Trump administration to complain about the Australian system.

However, the Albanese government has made clear it will not negotiate on the PBS to receive favourable trade outcomes from the Trump administration.

At a press conference in Adelaide on Friday, Health Minister Mark Butler said the government was working to understand the impacts of the announcement on Australian industry, but said the decision was not in the best interests of American consumers.

“We’ve been aware of the administration’s intention to take action against pharmaceutical imports into America, and we’ve been engaging with them and making the case why we should continue with the tariff-free trade that has characterised US-Australian relations for more than 20 years,” Butler said.

“None of these latest announcements for the US administration make a jot of difference to our determination to protect the PBS. The PBS has served Australians so incredibly well in terms of providing them with affordable access to the world’s best medicines.”

Coalition leaders described the announcement – which appears to apply to countries exporting drugs to the US – as “a shocking but unsurprising development”, pressing Prime Minister Anthony Albanese on his relationship with Trump.

“While other leaders are able to pick up the phone to the president, Anthony Albanese has not established such a relationship,” Opposition Leader Sussan Ley said in a statement released shortly before midday on Friday.

“We remain unsure whether the government made any representations on behalf of Australia and our important pharmaceutical industry … this is yet another issue the prime minister must address in his meeting with the US president in October, but he should not wait until then. Ambassador [to the US Kevin] Rudd should be working in earnest to seek an immediate reprieve for Australian exporters,” the statement read.

The tariff would come into effect less than three weeks before Albanese and Trump are set to meet at the White House on October 20.

The announcement was the third in a series of tariff announcements issued through Truth Social. In one post, the president announced 50 per cent tariffs on kitchen cabinets, bathroom vanities and associated products, and a 30 per cent tariff on upholstered furniture, citing “the large scale ‘FLOODING’ of these products into the United States by other outside Countries”.

Trump also announced the imposition of a 25 per cent tariff on “on all ‘Heavy (Big!) Trucks’ made in other parts of the World”.

The office of Trade Minister Don Farrell was also contacted for comment.

More to come.

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