U.K. and U.S. reach deal for zero tariffs on British-made pharmaceuticals
Dec. 1 (UPI) — The United States and the United Kingdom have agreed on a zero-tariffs deal for medications manufactured in the U.K.
In the agreement, the U.K. will pay more for medications through the National Health Service and the United States will keep import tariffs on U.K. pharmaceuticals at zero for three years.
It’s the first time the NHS will pay more for medicine in more than 20 years.
Medications are one of the U.K.’s biggest exports to the United States, and in September, President Donald Trump threatened to raise the tariffs to 100%.
Trump is also adding a 25% tariff on all heavy-duty trucks and 50% on kitchen and bathroom cabinets.
“The reason for this is the large-scale ‘FLOODING’ of these products into the United States by other outside Countries,” Trump posted on Truth Social on Thursday.
Neil Shearing, chief economist at Capital Economics, told the BBC that the announcement wasn’t as big of a deal as it appears.
“Many of the world’s largest pharmaceutical companies either already have some production in the U.S. or have announced plans to build production in the near future,” he said.
A press release from the U.K. government said, “Tens of thousands of NHS patients will benefit from a landmark trade deal between the U.K. and the U.S., which will secure and expand access to vital drugs, safeguard our medicines supply chain, and drive crucial investment while supporting U.K. patients and industries.”
The deal also includes investment from the U.K. government of about 25% more in “innovative, safe, and effective treatments — the first major increase in over two decades. It means the National Institute for Health and Care Excellence will be able to approve medicines that deliver significant health improvements but might have previously been declined purely on cost-effectiveness grounds — this could include breakthrough cancer treatments, therapies for rare diseases, and innovative approaches to conditions that have long been difficult to treat. These changes will ensure that NICE is able to continue its world-leading approach to assessing drugs and treatments and keep pace with the commercial and economic environment in which pharmaceutical companies are operating in today.”
“This will support thousands of skilled jobs, boost our economy and ensure that the breakthroughs that happen in our labs turn into treatments that benefit families across the country,” said Science and Technology Secretary Liz Kendall in a statement.
“This deal guarantees that UK pharmaceutical exports — worth at least $6.6 billion a year — will enter the U.S. tariff free, protecting jobs, boosting investment and paving the way for the U.K. to become a global hub for life sciences,” said Business and Trade Secretary Peter Kyle in a statement.
