👉 Background: Back in April, we spoke about Trump’s global tariffs, which led to an economic meltdown. The US markets dropped more than 7% due to the uncertainty and global risks. Trump delayed the tariffs by 90 days, but the tariffs have reared their ugly heads again.

‍👉 What happened: This time around, Trump has said he’s fed up with countries “free-riding” off American drug innovation. As a result, he's threatened to slap 200% tariffs on imported pharmaceuticals. In fact, Aussie pharma and biotech companies like CSL are staring to panic, and begging the government to do something about this ASAP.

‍👉 What else: If this is tariff is implemented, it could really impact the $2.2 billion of Australian pharma goods exported to the US last year.

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‍What's the key learning?

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‍💡When you rely on one country to buy a large chunk of your products, their politics become your problem. And Australia’s pharmaceutical sector is highly exposed to the US.

💡Roughly 38% of Australia’s pharma exports go to the US each year. And that means even a small policy shift in the US can have an outsized impact here. In this case, it ain’t a small policy shift… it’s a ginormous 200% tariff.

💡The Pharmacy Guild of Australia reckon that these monster tariffs could crumble the whole industry if this isn’t sorted out - especially that pharmaceuticals are Australia's second biggest export to the US — behind beef. So this is a reminder that the more you rely on selling in a particular geography, the more exposed you are to their politics and policies.