President Donald Trump announced new tariffs on patented medicines and their components on Thursday, saying the White House formally set the rule.
Under the proposal a standard tariff of 100 % will apply to most products. However, a lower rate of 15 % is set for the European Union, Japan, South Korea, Switzerland and Liechtenstein. The United Kingdom is working on a special exemption.
The tariffs will take effect after 120 days for large firms and after 180 days for smaller businesses. Trump says the policy will spur increased domestic production of pharmaceuticals and relies on Section 232 of the Trade Expansion Act of 1962, which allows the president to impose restrictions if imports threaten national security.
Last week the EU Parliament approved the trade agreement with the United States. It also adopted an expanded waiver clause: should the U.S. raise tariffs above the 15 % ceiling set in the agreement or introduce new duties on EU goods, the European Commission could propose suspending all or some of the preferential trade measures.