TARIFF WAR PUTS PHARMA IN CROSSHAIRS

While several other countries in the world have probably heaved a sigh of relief, though, for three months, China has launched an onslaught on the US in the bitter trade tariff war.

- Dr Milind Kokje Chief Editor [e-mail]

Like bidding in an auction, both the US and China are increasing the ‘reciprocal’ tariffs against each other. From the US side, it has reached the level of 145 per cent in response to China’s announcement to raise tariffs on imported US goods from 84 to 125 per cent, responding to the US's first salvo of raising tariffs to 104 per cent. With that, the countries appeared to be locked in an intense trade war, with pharmaceuticals, soon, likely to be part of it.

Though medicines were exempted from the tariffs till now, the US President Donald Trump said that he would soon announce major tariffs which could be as high as 25 per cent on imported pharmaceuticals. Due to the 1995 World Trade Organisation (WTO) agreement, medicines attracted less or no import duty in several countries, including the US, to keep the drug prices low. Some active pharmaceutical ingredients (APIs) used to make drugs attract duty. But the US president's announcement in the first week of April makes it mandatory to take note of the issue, particularly considering the pharmaceutical trade volume between the US and China.