Trump Targets Pharma Tariffs, Australia Faces Economic Blow

Donald Trump is back in the headlines — and this time, he's threatening to slap fresh tariffs on pharmaceuticals, a move that could seriously hit Australia where it hurts.

Pharmaceuticals had just been spared from last week’s sweeping new "reciprocal" tariffs. But in a speech this morning, Trump said that exemption might not last much longer. Speaking at a National Republican Congressional Committee dinner, he dropped this bombshell:

“We’re going to be announcing, very shortly, a major tariff on pharmaceuticals,” he said. “And when they hear that, they will leave China, and they will leave other places because more of the product is here.”

That might sound like a blow aimed at China — but it could end up hurting Australia just as much. Pharmaceuticals are one of our biggest exports to the US, worth about $1.6 billion a year.

And while Trump didn’t name Australia directly, he did take a swipe at countries that cap the price of medicines — something we do through the Pharmaceutical Benefits Scheme (PBS). He criticized the idea of governments saying, "you can't charge more than $88 otherwise you can't sell your product," which is basically how the PBS works.

In response, Prime Minister Anthony Albanese came out swinging, promising the PBS isn’t going anywhere.

“Our PBS is an essential part of who we are,” he said. “We will never negotiate on it. We will never undermine it.”

Opposition Leader Peter Dutton agrees — both major parties are united on this one.

But the market didn’t take the news lightly. Shares in CSL, one of Australia's biggest pharmaceutical companies, dropped about 5% today after Trump’s announcement.

This all comes as Trump’s so-called “Liberation Day” tariffs — including a massive 104% tariff on Chinese goods — kicked in earlier today. The baseline 10% tariff on Australian goods started over the weekend, but the real sting came this afternoon with higher rates on dozens of countries: 46% on Vietnam, 32% on Taiwan, 25% on South Korea, 24% on Japan, and 20% on the EU.

Asian markets didn’t take it well. Japan’s Nikkei dropped around 5% today, and there’s a growing sense of unease across global financial markets.

Back home, Treasurer Jim Chalmers hit pause on the election trail to hold an emergency meeting with Reserve Bank Governor Michele Bullock and key financial officials to talk strategy.

“It’s a really good opportunity for us to confer with, compare notes with and coordinate our efforts with the regulators and others involved in the market right now,” he said.

Despite the chaos, Chalmers says Australia’s economy is strong enough to ride it out — but admits the government is keeping a close eye on everything.

“We are confident that we can weather these global conditions, but we’re not complacent.”

So yeah… buckle up. It’s shaping up to be a bumpy economic ride.