EU and US agree preliminary tariffs deal

The European Commission has reached a provisional deal on tariffs and trade between the EU and US, President Ursula von der Leyen has announced.

Confirmed on 27 July, the new agreement provides “certainty in uncertain times” and a framework that “will further reduce tariffs on more products, address non-tariff barriers, and cooperate on economic security”.

Specifically, for most EU exports, including pharmaceuticals, the deal has “stabilised on a single 15 percent tariff rate”, providing EU business and citizens with “much-needed clarity”, according to von der Leyen. Yet US President Trump refuted this, stating that pharmaceuticals are not covered in the trade deal. However, until the deal is fully implemented, the tariff rate is zero.

This current iteration of the EU-US trade tariffs deal is not legally binding and a joint statement is anticipated prior to 1 August, when the US “will apply this maximum tariff on the vast majority of EU exports,” European Commission noted.

For “certain drug generics”, tariff rates “will go back to pre-January levels. This will provide immediate tariff relief for key EU industries”, European Commission added.

Overall, considering the present uncertain economic climate, the new EU-US deal offers EU businesses “more predictability”, enabling them to plan and invest by “ensuring immediate tariff relief” and securing access to the EU’s largest export market, EU Commission’s Chief continued.

She asserted that the organisation is “taking bold action to make Europe more competitive, more innovative and more dynamic”, especially when the EU’s Single Market “is our greatest asset and our safe harbour, especially in turbulent times”.

Pharma’s perspective on the new EU-US trade deal

However, the European Federation of Pharmaceutical Industries (EFPIA) remarked that the tariffs on medicines “will disrupt supply chains, impact on investment in research and development, and ultimately harm patient access to medicines on both sides of the Atlantic”. 

The organisation reasoned that “there are more effective means than tariffs” to advance economic growth and “ensure a fairer distribution of how global pharmaceutical innovation is financed”.

From a European perspective, this involves “rethinking how we value innovation, significantly increasing what the region spends on innovative medicines and creating an operating environment that can accelerate turning Europe’s great science into new treatments”.