Workers in a factory assemble amber bottles on a conveyor belt

European workers in a factory setting are assembling amber bottles on an industrial production line, wearing protective gear. By MDL.

Economy

How the EU Outmaneuvers Trump’s Pharma Tariffs: A 15% Shield for European Businesses?

EU: Existing trade deal with US to cap pharma tariffs at 15%, despite Trump’s 100% plan.

byAndres Castro

September 26, 2025, 5:28 PM

Executive Summary

The European Commission is confident that an existing trade agreement will cap US tariffs on EU pharmaceutical imports at 15%, despite President Trump’s recent announcement of 100% tariffs.

The EU considers itself the sole trade partner to have secured an “all-inclusive” 15% tariff ceiling with the US, which it believes will protect its pharmaceutical industry.

While avoiding 100% tariffs is seen as a victory, the 15% cap still represents an increase from the previous zero-tariff condition for EU pharmaceutical products, leading to caution from countries like Ireland.

The Story So Far

The European Commission’s confidence stems from a pre-existing trade agreement with the United States, which they believe acts as a unique “insurance policy” for EU pharmaceutical exports. This agreement, formalized in a Joint Statement from August 21, explicitly caps any new US tariffs on EU goods at 15%, a provision the EU expects to override President Trump’s recent announcement of a 100% tariff on pharmaceutical imports, despite the 15% cap still representing an increase from previous zero-tariff conditions.

Why This Matters

The European Commission anticipates that a pre-existing trade agreement will uniquely shield the EU’s pharmaceutical industry from President Trump’s recently announced 100% tariffs, capping them at 15%. However, this still represents a significant increase from the previous zero-tariff regime, which could raise costs for European pharmaceutical exports to the U.S. and necessitates close monitoring by key EU players like Ireland.

Who Thinks What?

The European Commission is optimistic that an existing trade agreement, which caps tariffs on EU goods at 15%, will shield the EU’s pharmaceutical industry from President Donald Trump’s newly announced 100% tariffs on pharmaceutical imports.

President Donald Trump announced 100% tariffs on branded or patented pharmaceutical products, effective October 1, 2025, unless manufacturing plants are built in America.

Ireland, home to the EU’s most exposed pharmaceutical industry, views the 15% tariff cap as only a “modest victory” since it still represents an increase from the previous zero-tariff conditions, and is closely studying the announcement’s impact.

The European Commission is optimistic that a previously agreed trade deal with Washington will shield the EU’s pharmaceutical industry from new 100% tariffs announced by President Donald Trump on pharmaceutical imports into the United States. Despite Trump’s social media declaration on Thursday of escalating tariffs, the Commission maintains that an existing agreement, capping tariffs on EU goods at 15%, will extend to the pharmaceutical sector, offering a unique “insurance policy” for European economic operators.

EU’s Confidence in Existing Agreement

EU Commission deputy spokesperson Olof Gill stated on Friday that the 15% tariff ceiling for EU exports is “all-inclusive,” preventing higher tariffs from emerging for European businesses. The Commission considers the EU the sole trade partner to secure such an outcome with the US.

According to the Commission, the US has expressed an intent to “promptly ensure” that the tariff rate on pharmaceuticals does not exceed 15%. This comes despite President Trump’s announcement on Truth Social of a 100% tariff on branded or patented pharmaceutical products, effective October 1, 2025, unless manufacturing plants are built in America.

EU officials believe the US has upheld its commitments under the trade deal thus far. This adherence contributes to their confidence that the EU will circumvent Trump’s newly announced tariffs on pharma products.

Modest Victory Amidst Trade Dynamics

While the potential avoidance of 100% tariffs is viewed positively, it represents a modest victory. Previously, US tariffs on EU pharmaceutical products stood at 0%, meaning the 15% cap still signifies an increase for the sector.

Ireland, home to the EU’s pharmaceutical industry most exposed to US trade, responded with caution to Trump’s announcement. Tánaiste Simon Harris, Ireland’s deputy prime minister, noted that the EU and US Joint Statement from August 21 explicitly capped any new US tariffs on pharmaceuticals under its Section 232 investigation at 15% for EU exports. He confirmed that Ireland would be studying the announcement’s impact.

Key Takeaways

The European Commission remains confident that a prior trade agreement will cap US tariffs on EU pharmaceutical products at 15%, despite President Trump’s recent announcement of 100% tariffs. This demonstrates the EU’s unique position in US trade relations, though it still represents an increase from previous zero-tariff conditions. Ireland, a key player in the EU’s pharmaceutical sector, is closely monitoring the situation.