Washington: The exemption stems from a trade deal clinched in July, which caps pharmaceutical tariffs between the U.S. and EU at 15%.
The announcement came just a day after Trump declared via Truth Social that all branded and patented pharmaceutical products would face a steep 100% levy from October 1 unless companies established manufacturing plants in America. But the White House clarified that countries with trade pacts, including the EU and Japan, would be spared the new tariffs.
European Commission deputy spokesperson Olof Gill emphasized that the tariff ceiling “represents an insurance policy” ensuring no higher rates for EU exporters. Brussels highlighted that the EU remains the only partner to have secured such an outcome.
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The exemption particularly eased concerns in Belgium, where pharmaceutical exports to the U.S. account for a quarter of the sector’s trade, making up 55% of the country’s total export value. Belgian industry group essenscia admitted the announcement had sparked “a day of uncertainty.” Ireland’s Deputy Prime Minister Simon Harris echoed relief, noting that Ireland alone accounts for nearly a quarter of U.S. pharmaceutical imports.
Markets showed muted reactions, with European giants AstraZeneca, Novartis, and Roche largely unaffected. Many firms had already invested billions in U.S. manufacturing capacity to hedge against potential trade shocks. Roche confirmed ongoing facility construction in the U.S., while Novartis said it expected “minimal to no impact” from the tariffs.
Still, industry leaders warned of broader risks. The European Federation of Pharmaceutical Industries and Associations cautioned that “tariffs on medicines would create the worst of all worlds,” threatening supply chains and patient access. While Europe escaped the brunt of the policy, Japanese pharmaceutical stocks fell sharply on fears of exposure.
The EU-U.S. framework agreement, formalized in August, not only capped pharma tariffs at 15% but also exempted generics, aircraft parts, and certain natural resources.
