Trump flags tariffs of 200pc on pharmaceuticals, 50pc on copper | Breaking News & Latest Australia Updates

Trump flags tariffs of 200pc on pharmaceuticals, 50pc on copper — Topic:World Politics Donald Trump says tariffs on pharmaceuticals and copper are coming soon.(Reuters: Kevin Lamarque) US President Donald Trump says ...

Topic:World Politics

Donald Trump says tariffs on pharmaceuticals and copper are coming soon.(Reuters: Kevin Lamarque)

US President Donald Trump says drug manufacturers will be given time to move manufacturing to the US before being hit with a tariff as high as 200 per cent.

Copper is likely to be subject to a 50 per cent tariff, bringing it in line with aluminium and steel.

Formal announcements are expected soon, though Commerce Secretary Howard Lutnick said his department was still completing an investigation into the need for pharmaceutical tariffs.

Donald Trump has flagged a possible 200 per cent tariff on pharmaceuticals — one of Australia's biggest exports to the US — but says manufacturers will be given time to move to America to dodge the tax.

The US president also said copper was likely to be hit with a 50 per cent tariff.

To date, pharmaceuticals and copper have both been exempt from the US's ever-evolving tariffs regime, pending two separate investigations by the Department of Commerce.

But Mr Trump has long railed against American dependence on foreign producers of the products, given the lifesaving nature of many imported medicines and copper's importance to the industrial sector and technological innovation.

Speaking to the media before a cabinet meeting, Mr Trump said pharmaceutical producers would get a grace period to move production to the US.

"We're going to give [drug manufacturers] about a year, a year and a half to come in, and after that, they're going to be tariffed," he said.

"They're going to be tariffed at a very, very high rate, like 200 per cent. We'll give them a certain period of time to get their act together."

Pharmaceutical tariffs could be particularly punishing for Australia.

Last year, Australia exported $US1.4 billion ($2.2 billion) in pharmaceutical products to the US, according to the UN's Comtrade database.

That was more than 40 per cent of its total pharmaceutical export value of $US3.2 billion ($4.9 billion).

Commerce Secretary Howard Lutnick later suggested a final decision on pharmaceutical tariffs had not been made.

His department's investigation into pharmaceutical imports would be completed at the end of the month, he said.

"And so the president will then set his policies," Mr Lutnick told business network CNBC. "And I'm going to let him wait to decide how he's going to do it.

"He said, if you don't build in America, they're going to be a high rate. But he may consider that if you're building in America, to give you the time to build … and then the tariff will be much higher."

Copper is also a significant export product for Australia, but sales to the US last year were valued at just $US36 million ($55 million) — less than 1 per cent of Australia's total copper exports, which were valued at $US4.4 billion ($6.7 billion).

"Today, we're doing copper," Mr Trump said after speaking through some of his past tariff announcements. "I believe the tariff on copper, we're going to make it 50 per cent."

Mr Lutnick said the copper tariff would probably take effect at the end of July or start of August. Aluminium and steel are already subject to 50 per cent tariffs.

The announcements come a day after Mr Trump released letters he had sent to foreign leaders, which outlined new country-specific tariffs to take effect on August 1.

Australia, however, is not expecting an increase in the 10 per cent tariff already imposed on its exports.

On Monday, the Productivity Commission releasedmodelling that projected Australia could enjoy a small economic benefitfrom Mr Trump's tariffs.

But the commission also warned that an escalating global trade war would be "very bad for Australia".

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