The United States and the European Union (EU) have agreed to cap tariffs on EU-made pharmaceuticals, including generics and biosimilars, at 15%. Earlier, attention turned to whether Korea, which secured most-favored-nation treatment from the U.S., would also face similar tariff levels.
According to a joint statement released on the 21st (local time), the U.S. will apply most-favored-nation (MFN) tariffs to certain EU products starting September 1. The items subject to these tariffs include natural resources, all aircraft and aircraft parts, generic pharmaceuticals, their components, and chemical precursors.
Pharmaceuticals, semiconductors, and lumber are included in the list of products subject to the Section 232 investigation under the Trade Expansion Act. Section 232 allows the U.S. to increase tariffs or restrict imports of specific goods for national security reasons. The Trump administration examined the impact of pharmaceutical imports on national security last April, and the former president warned that tariffs could reach as high as 250%.
However, this agreement has confirmed that the tariffs on EU-made pharmaceuticals, semiconductors, and lumber will not exceed 15%. Under this agreement, generics will be subject to an MFN tariff of up to 15%. Generics priced lower than those in the U.S. will incur a maximum tariff of 15%, while those priced higher will be exempt from tariffs.
Korea is expected to be affected as well. Korea has already secured most-favored-nation treatment for pharmaceuticals in trade negotiations with the U.S., making it likely that similar tariff levels will apply. Particularly, if Korea's leading export, biosimilars, is included as generic pharmaceuticals, attention is drawn to whether they will be exempt from tariffs.
Domestic corporations currently selling biosimilars in the U.S. include Samsung Bioepis and Celltrion. Several companies, such as Daewoong Pharmaceutical, Huons, Hanmi Pharmaceutical, and GC Biopharma, producing chemical synthetic generic drugs have also entered the U.S. market.
A representative from the Korea Biotechnology Industry Organization noted, "Generally, generic pharmaceuticals and biosimilars are used and regulated separately," adding, "We need to wait for the final interpretation from the U.S. regarding tariff application." The industry believes that the actual application of pharmaceutical tariffs should be confirmed through the final findings of the Section 232 investigation.