The Albanese government is scrambling to respond to a fresh trade threat from US President Donald Trump, who has floated a staggering 200 per cent tariff on pharmaceutical imports and a 50 per cent tariff on copper – measures that could significantly damage Australia’s exports to the United States.
Treasurer Jim Chalmers confirmed that the government is “urgently seeking” clarification from Washington following the announcement, warning of serious consequences for Australia’s $2 billion pharmaceutical export industry.
“These are obviously very concerning developments,” Mr Chalmers said. “Our pharmaceutical sector is far more exposed than copper, and any such tariff would hit Australian manufacturers hard.”
Pharmaceuticals are one of Australia’s biggest export industries to the US, in stark contrast to copper, where exports to America totalled only $55 million last year. Despite the relatively minor impact of copper tariffs, the proposed pharmaceutical duties have triggered a political storm.
Trump, speaking at a cabinet meeting, said pharmaceutical companies would have “about a year to get their act together” before the 200 per cent tariff would be imposed. For copper, the 50 per cent tariff could be implemented by August.
The announcement sparked a fierce reaction from the federal opposition. Shadow Trade Minister Kevin Hogan accused the Albanese government of “dropping the ball” and failing to secure a direct meeting between Prime Minister Anthony Albanese and President Trump.
“This should have been raised months ago,” Hogan said. “It’s embarrassing that our Prime Minister still hasn’t met with Trump.”
The US has already imposed a baseline 10 per cent tariff on all Australian exports under a revised global trade regime. In addition, Australia’s steel and aluminium sectors face industry-specific tariffs of 50 and 25 per cent respectively.
The broader picture is even more worrying. Trump has issued tariff threats to more than a dozen nations including key allies like Japan and South Korea, with “Liberation Day” levies of 25 per cent set to begin August 1 unless deals are made.
Although Australia has so far avoided these punitive reciprocal tariffs, uncertainty about future developments looms large. The Productivity Commission warned that while tariffs may provide a modest GDP boost in the short term, a global trade war would outweigh any gains and reduce national output.
Mr Chalmers insisted that Australia would continue advocating for open markets. “Tariffs hurt everyone, including the country imposing them,” he said. “We will not trade away our Pharmaceutical Benefits Scheme or compromise on health.”
Amid calls for action, the government is also considering scrapping hundreds of outdated tariffs on imported goods to boost productivity and trade resilience.
As Trump resets global trade priorities, Australia finds itself walking a tightrope – caught between strategic alliances and economic survival.
