PBS 'not on the table' to escape concerning pharmaceuticals tariff | Breaking News & Latest Australia Updates

PBS 'not on the table' to escape concerning pharmaceuticals tariff — Topic:Pharmaceuticals US President Donald Trump has flagged further tariffs, including a possible 200 per cent tariff on pharmaceuticals.(AP: Evan Vuc...

Topic:Pharmaceuticals

US President Donald Trump has flagged further tariffs, including a possible 200 per cent tariff on pharmaceuticals.(AP: Evan Vucci)

Treasurer Jim Chalmers says America's proposed 200 per cent tariff on pharmaceuticals is "very concerning".

The treasurer reaffirmed Australia would not trade away its PBS to escape the tariffs.

The United States is expected to impose the new round of tariffs on August 1.

Australia is urgently investigating "concerning" new tariffs on pharmaceuticals announced by the United States, repeating that the nation will not be bullied into weakening its Pharmaceutical Benefits Scheme in order to escape a tariff.

US President Donald Trump imposed a fresh round of tariffs overnight, including a possible 200 per cent tax on pharmaceutical imports and a 50 per cent tax on copper imports.

Pharmaceuticals are one of Australia's largest exports to the US, with about $2.2 billion in pharmaceutical products exported to the US last year.

Treasurer Jim Chalmers told ABC Radio National the new tariffs would inject more volatility into global trade.

"They're obviously very concerning developments, we are talking about billions of dollars of exports to the US," Mr Chalmers said.

"Our pharmaceuticals industry is much more exposed to the US market, and that's why we're seeking, urgently seeking, some more detail on what's been announced."

The treasurer also used the interview to voice the disappointment of millions of households "who were hoping for rates relief yesterday, and didn't get it", after the Reserve Bank decided to leave the cash rate on hold at 3.85 per cent amid ongoing global uncertainty.

Jim Chalmers says the new round of proposed tariffs are "very concerning" to Australia.(ABC News: Callum Flinn)

The Trump administration had been urged by America's powerful pharmaceutical lobby to slap tariffs on Australian pharmaceuticals in retaliation for its Pharmaceutical Benefits Scheme, which requires drug companies to negotiate prices with the government in order for customers to receive a subsidy for their medicines.

In March, industry lobbying body PhRMA labelled PBS subsidies an "egregious and discriminatory" trade instrument.

The federal government has flatly ruled out negotiating away the scheme that underpins cheaper medicines for millions of Australians.

"Our Pharmaceutical Benefits Scheme is not something we are willing to trade away or do deals on," Mr Chalmers said.

The federal government's economic think tank says Australia will likely be a winner from Donald Trump's tariffs if it does not retaliate and that we would be better off by removing more of the nation's remaining tariffs.

A Productivity Commission report released this week concluded that Mr Trump's first round of tariffs, which hit Australian steel and aluminium,could actually be "good" for the Australian economy, with global trade reshaping around growing US protectionism.

It concluded Mr Trump's "liberation day" tariffs could provide a 0.37 per cent boost to Gross Domestic Product.

However, the tariffs on steel and aluminium will sit at a much smaller rate of 10 per cent, and the share of Australian steel and aluminium exports that go to the US is much smaller than pharmaceuticals.

About 40 per cent of Australia's pharmaceutical exports are to the United States.

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