It always sounded too good to be true. The pharma sector has been in Donald Trump’s sights dating back to his first presidency and, since he returned to power, he has been vocal in his attacks on the sector, consistently threatening punitive tariffs.
Then, at a stroke we were told, the US president had settled for including the sector in the 15 per cent tariff his administration was imposing on most imports from the European Union.
It was so extraordinary that both sides were pressed for confirmation.
Taoiseach Micheál Martin confirmed it was their “clear understanding” that a maximum 15 per cent tariff would apply to exports of pharmaceuticals and semiconductors.
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“Once they introduce tariffs on pharma, they will be at the level of 15 per cent,” said a senior EU official involved in the talks.
A White House fact sheet issued in the wake of the trade deal said: “The European Union will pay the United States a tariff rate of 15 per cent, including on autos and auto parts, pharmaceuticals, and semiconductors”.
But, just one week after that deal was agreed, Mr Trump was once again raging about pharma and promising to hit the sector with tariffs of up to 250 per cent over the coming years – inconveniently name-checking Ireland alongside China as he did so.
[ Taoiseach urges Trump to tread carefully on pharma tariffsOpens in new window ]
It puts the sector and the Irish Government in a very difficult position.
While everyone accepts Big Pharma can live with a 15 per cent tariff even if it grates, they also understand that the sort of punitive tariffs Mr Trump is now talking about will fundamentally change the dynamics of the sector – to say nothing about where it would leave patients and their insurers in the US where pharma companies are also facing a Trump-driven campaign to lower prices.
And there is no way that such a pivot could be anything but bad for Ireland Inc which relies on pharma for most of its exports to the US, a sizeable chunk of its corporation tax receipts and much of the State’s foreign direct investment.
[ Irish exporters ‘told to shut their mouths’ over Trump tariffsOpens in new window ]
It puts the Government in an extremely delicate position. If pharma is not, in fact, covered by the von der Leyen trade deal, can Ireland support such a deal in any ultimate vote.
On the other hand, no EU government is going to be keen to unravel a deal which was supposed to provide at least the security of certainty that would allow their economies to move forward.
Uncomfortable times in Government buildings but you get the impression that discomfiting European governments costs Mr Trump not a moment’s sleep.
