Last week, President Trump announced new tariffs on imported pharmaceutical drugs, set to take ffect in 120 days, that could be as high as 100%. The good news is that the effective tariff rate will be a lot lower than that on most countries:

Trade Deal Countries: If a pharmaceutical product is from the European Union, Japan, Korea, or Switzerland and Liechtenstein, a 15% tariff will apply.  If a pharmaceutical product is from the United Kingdom, a lower tariff will apply, subject to the recently concluded UK pharmaceutical agreement.

These new pharmaceutical tariffs will, for obvious reasons, make drugs more expensive here at home as importers pass on some of the cost of the tax. So to us this makes no sense given that Americans are already angry about drug prices.

Trump has rightly cried out “foul” that the citizens of 32 OECD nations pay on average less than half for drugs of what Americans are charged.  This also hurts new drug development by making America pay the full freight of bringing new drugs to market, while the rest of the world is a free rider.  The solution isn’t tariffs, but a Trump requirement in trade negotiations that other rich countries lift their price controls and pay their fair share.