President Donald Trump announced plans to enact "major" tariffs on imported pharmaceuticals, which sent global drugmakers' stocks plummeting and threatened to send drug prices soaring worldwide.
Most countries have imposed few or no tariffs on medicines as part of a 1995 World Trade Organization agreement, but Trump intends to end that exemption as part of his sweeping "reciprocal" tariffs against dozens of U.S. trading partners, and Yahoo senior finance columnist Rick Newman told "CNN News Central" the results would be disastrous.
"As everybody knows, pharmaceuticals are cheap so what the heck, we can raise the price a little bit," Newman said. "We import about $200 billion worth of pharmaceutical products, including a lot of generic drugs, which are the ones that people use to get their pharmaceutical bills down. So, yes, I mean, Trump is going to try to, I mean, as he's doing in all these other industries, try to get more U.S. production by first punishing Americans, by raising our prices as if that is somehow going to solve the problem."
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The U.S. has for decades imported vast quantities of finished medicines from China, Europe and India without buyers paying tariffs, although some pharmaceutical ingredients are taxed with duties, but Trump told Republican donors that he would soon be imposing "pharma" tariffs at some unspecified "level that you haven't really seen before."
"This is why economists are just pulling their hair out over this, because Trump is holding a gun to the head of the U.S. economy," Newman said, "and to go back to these other countries, I mean, just to go back to China. China does not have trade wars with any other country besides the United States, so China has other choices. Trump is waging this trade war with essentially every country in the world and pushing prices up for everything, so people are going to start to see these prices and wonder what's going on."
"I cannot explain where Trump thinks this is going," he added, "because this is going to be quite bad for American consumers."
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