U.S.-EU trade framework caps pharma tariffs on branded drugs at 15%

Yesterday, the White House and the European Union issued a joint statement announcing they've reached an agreement on the "United States–European Union Framework on Reciprocal Fair and Balanced Trade," effective Sept. 1.

The Framework Agreement caps tariffs on EU-imported branded pharmaceuticals, semiconductors and lumber at 15%. These products are currently under Section 232 investigation to determine whether they pose a national security threat.

Per the trade deal, generic pharmaceuticals, their ingredients and chemical precursors, unavailable natural resources and all aircraft and aircraft parts imported from the EU are subject to the World Trade Organization's "most-favored nation" (MFN) rate.

The two countries will "consider other sectors and products that are important for their economies and value chains" to add to the MFN rate group, according to the announcement.

The agreement, formalized last month, brings some stability to the pharmaceutical industry, which has faced threats from the President of tariff rates up to 250% for imported drugs.

While the overall decision on the comprehensive section 232 tariffs for other countries is still pending, the 15% tariff cap limits on pharmaceuticals imported from the EU give company leaders clearer guidance on how to proceed with strategic initiatives and operational planning.

Alivia Kaylor is a scientist and the senior site editor of Pharma Life Sciences.