Trump's trade agreement with the EU brings tariffs on pharmaceuticals. A setback for Europe's pharmaceutical industry - and for global healthcare. How will the European pharmaceutical industry and politicians react to this?

A "big deal"? - Not for Europe!

At the end of July, Donald Trump and EU Commission President Ursula von der Leyen presented a new transatlantic trade agreement. The staging was great, but the content was sobering: For the European pharmaceutical industry, the agreement primarily means new burdens. 15% tariff on drugs exported to the USA - this is now the framework for reciprocal market access. The only exceptions are selected generics and pharmaceutical raw materials.

While Trump presented his political success to the media, it was barely discussed that this agreement puts European companies in particular at a disadvantage - and in an industry that is not only of economic but also social importance.

Tariffs against domestic supply?

The situation is particularly contradictory from a US perspective: The United States is highly dependent on pharmaceutical imports, especially for active ingredients and precursors. Nevertheless, according to recent statements, the Trump administration is considering raising tariffs on drug imports to up to 250%. This would not only be economically counter-productive, but would also have a direct impact on healthcare in the USA.

In addition, shortly beforehand Trump had publicly advocated drastically reducing the price of drugs in his own country - with references to price differences of "up to 1,500%". However, the current measures are likely to have the opposite effect: Drugs are becoming more expensive, their availability more limited.

Supply chains under pressure – Europe forced to act

Pharmaceutical production today is based on global value chains: Active ingredients often come from Asia, further processing takes place in Europe, while the sales market is distributed worldwide. Trade barriers jeopardise this finely balanced system – and with it, international security of supply.

The duty-free nature of the transatlantic pharmaceutical trade to date has favoured innovation, cooperation and stable supply chains. Its cancellation by the USA now presents the European Union with the task of reacting strategically. Especially incomprehensible: Unlike aircraft and aircraft parts, medicines were not excluded from the agreement as strategically relevant goods. An omission with potentially far-reaching consequences.

Strategic responses instead of short-term reactions

The EU faces the challenge of effectively protecting its pharmaceutical industry in the face of the new US tariffs. Targeted measures are required - such as increased promotion of European production capacities, investment in research and infrastructure and the conclusion of new trade agreements with like-minded partners.

At the same time, the international pharmaceutical industry also has a role to play: Instead of reacting to national pressure with one-sided investments in the US market, a coordinated, joint approach is needed. The ability to act can only be secured in the long term by taking a united and strategically coordinated position.

Because: Those who deepen economic dependencies lose political and economic freedom over time.

Pharmaceutical interpreters and translators for particularly demanding projects

Professional pharmaceutical interpreters and experts for pharmaceutical translations are indispensable, especially in times of growing trade conflicts. We support pharmaceutical companies, associations and institutions with technically accurate translations and experienced interpreters - for example for GMP inspections, regulatory procedures and scientific and commercial content - to ensure that international communication runs smoothly even under difficult conditions.

 

Image: Library of Congress, unsplash.com