‘Hell-bent’: Labor senior figures losing hope of any carve-outs in future rounds of Trump tariffs

A senior Labor MP said while hopes of receiving tariff exemptions were small, there was a sense the US would be forced to reverse the decision following damage to its economy down the line.

Labor is increasingly operating on the assumption that the Trump administration will slap tariffs on more products.

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Expectations that Donald Trump could grant Australia any exemptions in his upcoming round of reciprocal tariffs are dwindling among senior government figures, who say the US President appears “hell-bent” on sweeping trade sanctions against Australia and other allies.

As the US pharmaceutical lobby accused Canberra of breaching obligations under the free-trade agreement with Washington by making it too difficult for foreign companies to list drugs on the Pharmaceutical Benefits Scheme, The Australian understands Labor is increasingly operating on the assumption that the Trump administration will slap tariffs on more of its products.

“I think they’re hell-bent on proceeding with this,” a senior government MP said. “And I think this is what (the US President) says it is, which is something designed to raise revenue – it’s as simple as that. There isn’t a hidden agenda here.

“He’s obviously prepared to sustain some pain for what he thinks is long-term gain.”

Following months of lobbying by the Pharmaceutical Research and Manufacturers of America, which demanded the Trump administration “address the many significant trade barriers” that foreign governments imposed against their products within days of the President’s inauguration, Anthony Albanese declared on Thursday that the PBS was “not for sale” and would not be part of future tariff negotiations.

The PhRMA group – which represents the US’s biggest drug manufacturers – singled out Australia and accused it of breaking the US-Australia free-trade agreement with its medicines regime. “Medicines discovered and manufactured by PhRMA member companies are the constant target of compulsory licensing and other harmful practices that deny the most basic intellectual property protections necessary to drive discovery and bring new treatments and cures to patients around the world,” the submission to a US trade review in January said.

“Biopharmaceutical innovators in the US face a wide array of damaging government pricing policies abroad.”

Tariffs on Australian pharmaceutical products would allow the Trump administration to appease some concerns of big pharma. Picture: NewsWire / Martin Ollman

Senior government figures said slapping tariffs on Australian pharmaceutical products would allow the Trump administration to appease some concerns of big pharma, which are also significant political donors.

The US drug companies’ tariff push came as the US tech lobby – representing the likes of Facebook and Mr Trump’s close ­adviser, tech billionaire Elon Musk – called on the White House to punish Australia for making tech companies pay fairly for news content.

While it did not call for tariffs, the Computer & Communications Industry Association said in a March 11 submission that the White House should act against Australia for the introduction of a news-bargaining code and moves to make streaming companies make a certain amount of Australian content.

PhRMA’s submission placed Australia and four other jurisdictions, including the EU, on a “watch list” for the Trump administration to consider; a further 19 countries, including Canada, were placed on a “priority watch list”.

It follows Mr Trump this month refusing to give Australia an exemption to 25 per cent tariffs on steel and aluminium products, which are worth about $1bn to Australia in exports to the US each year.

The announcement prompted Trade Minister Don Farrell to indicate Australia would consider taking the US to the World Trade Organisation if the matter were not resolved.

A senior Labor MP told The Australian that while hopes of receiving tariff exemptions next month were small, there was a sense the US would be forced to reverse the decision following damage to its economy down the line.

While noting the 25 per cent tariff may be a good indicator for the sorts of sanctions the US would place on other products next month, government sources said the matter was still not clear.

“God knows what (the tariffs) will be,” one MP said.

PhRMA attacked the $18bn PBS – which subsidises nearly 1000 medicines for Australians with Medicare cards – for not making it easier for American companies to be listed on the government scheme. “The PBS remains one of the few health programs in the world required to demonstrate a particular standard of cost-effectiveness and investment remains low in comparison to the overall health budget,” PhRMA’s submission said.

PhRMA pointed to the difficulties of listing medicines on the PBS, the scheme’s compulsory licensing requirements and the weak patent protections as key reasons behind its request to the Trump administration that “Australia be placed on the watch list in the 2025 Special 301 Report and that the US government continue to seek assurances that the problems described herein are quickly and effectively resolved”.

“Unfortunately, the Biden administration demonstrated limited ambition in addressing foreign intellectual property and market access barriers that impede US biopharmaceutical research, manufacturing and exports,” the submission read.

“Fair and transparent access to overseas markets and strong protection and enforcement of patents, regulatory test data and other intellectual property provide powerful incentives that drive and sustain substantial investments in valuable treatments and cures.”

The Prime Minister hit back at the demands from PhRMA, saying he would advocate for Australia’s national interests, “not the interests of big pharma”.

“Our PBS is not for sale,” he told ABC.

Peter Dutton also used a speech on Thursday to promise Australians he would “stand up and defend the PBS … against any attempt to undermine its integrity, including by major pharmaceutical companies”.

“We will work with our most important ally, the US, but we will fight against any big drug company imposing tariffs on our PBS,” he said to the Lowy Institute.

Opposition health minister Anne Ruston said Mr Albanese must immediately organise a face-to-face meeting with Mr Trump.

“He must travel to the US as a matter of urgency” she said in a statement.

“Failure to do so would be another sign of weak leadership from the Prime Minister.”

Health Minister Mark Butler said the push from the American pharmaceutical lobby was “of course concerning” but not new.