There appears to be “no immediate cliff-edge” for Irish exporters and pharma companies based here after the Trump administration announced 100 per cent tariffs on certain imported medicines overnight.
The White House said the US would impose tariffs of as much as 100 per cent on certain imported medicines, albeit with several major exemptions in the administration’s latest move to pressure drugmakers to manufacture more in the US.
The new levy, which US President Donald Trump authorised late on Thursday, applies to patented drugs made in countries that lack tariff deals with the US by companies that don’t have “most-favoured-nation” pricing agreements with the administration.
Tariffs on imports from major economies that cut deals with the White House will be capped at 15 per cent. That includes the European Union, South Korea, Japan, Switzerland and Liechtenstein, the statement said.
Imports from Britain will also face a lower rate, after it agreed to double government spending on new medicines as a proportion of GDP (gross domestic product) over the next decade in a separate deal struck on Thursday.
EY Ireland tax partner and co-head of geopolitical strategy Aidan Meagher said the “immediate impact” for Ireland and the EU “appears relatively contained”.
“Pharmaceutical exports from the EU to the US remain subject to a 15 per cent tariff cap under existing EU-US arrangement and generic medicines are currently exempt,” he said, adding the “bigger uncertainty” however is “company-specific”.
“Many of the world’s largest pharmaceutical companies – including many of those based here in Ireland – have already reached pricing and manufacturing agreements with the US administration,” he said.
For Irish-based operations, he said exposure will depend on how individual firms “align” their global manufacturing footprints, pricing strategies and future investment plans “with US policy”.
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“Therefore, while there appears to be no immediate cliff-edge for Ireland and companies based here, clarity on implementation, enforcement and exemptions will be critical.
“Maintaining certainty and competitiveness remains essential for a sector that is central to Ireland’s exports, employment and long-term investment.”
Chambers Ireland chief executive Ian Talbot said that while the impact “seems not” to have a significant impact on Irish exports, it “continues to point to the importance of Ireland and the EU accelerating actions within our own control”.
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“Continued unpredictability and uncertainty undermines business confidence and investment,” he said.
“Improving our competitiveness, building critical infrastructure and embracing free trade agreements such as Mercosur to diversify our markets are all becoming increasingly urgent.”
Carol Lynch, partner in BDO, said an issue outside of pharma is the “negative impact” of the tariffs on exporters of steel and aluminium products. “This is a significant issue for many Irish exporters in the domestic economy,” she said.
“The announcement has changed the application of the S232 duties in relation to derivatives, [such as] those downstream products made substantially of steel or aluminium. Essentially it looks like it will increase the duty cost as it will now be applied on the full invoice value rather than just the steel/aluminium value.”
Medicines made by companies that commit to some manufacturing in the US would see their imported products taxed at 20 per cent, and if they strike “most favoured nation” agreements, the rate would fall to zero, the White House said.
Fourteen of the largest pharma manufacturers – almost all of which have manufacturing operations in Ireland – have signed such deals with the Trump administration.
They are: Pfizer, AstraZeneca, EMD Serono, Novo Nordisk, Eli Lilly, Amgen, Boehringer Ingelheim, Bristol Myers Squibb, Genentech (Roche), Gilead Sciences, GlaxoSmithKline, Merck (known in Ireland as MSD), Novartis and Sanofi.
Veda Partners analyst Spencer Perlman estimated that the full 100 per cent tariff would apply to only around $12 billion worth of goods, or less than 5 per cent of the $274 billion in total US pharmaceutical imports in 2025.
The White House said the tariff-free exemption would last until January 29th, 2029.
Duties for products made by certain larger companies that will be hit by the tariffs will take effect in 120 days, while items from smaller manufacturers won’t be hit for another 180 days, the White House said. – Additional reporting Bloomberg
