Gov't support needed to offset risks from Trump's drug tariffs: think tank
Samsung Electronics Chairman Lee Jae-yong takes a tour at a pharmaceutical production facility at its bio affiliate, Samsung Biologic in this undated photo provided by Samsung. Yonhap
Korea's pharmaceuticals industry needs government-level support to mitigate potential impacts from the United States' aggressive tariff policies, a local think tank said Tuesday.
The recommendation comes after U.S. President Donald Trump threatened to impose tariffs of up to 200 percent on foreign-made pharmaceuticals as part of his protectionist trade agenda.
"If Washington levies tariffs on pharmaceuticals, it would slash profit margins and hurt the cost competitiveness of domestic firms that export such products," the Korea Institute for Industrial Economics & Trade (KIET) said in a report.
"The government needs to come up with practical support measures, such as subsidies for customs duties or logistics costs, to support affected firms operating in the U.S. market," the report read.
The U.S. accounted for nearly 20 percent of Korea's pharmaceutical exports last year, while Korea made up a mere 2 percent of U.S. drug imports, according to government data.
The agency urged the government to highlight the importance of forging a strategic partnership between allies, citing Korea's role during the COVID-19 pandemic as a major contract manufacturer of virus vaccines.
The KIET also recommended that domestic regulators improve approval standards for new medicines in response to complaints from the Trump administration that Korea imposes non-tariff barriers restricting the entry of new foreign-made drugs.