Labor lashed for ‘negligent’ approach to US relationship

The Albanese government was left “urgently seeking” details after the US President’s announcement this week, despite months-long murmurs Washington could take action on pharmaceuticals.

The Trump administration has also not kept secret it was mulling further sectoral tariffs to impose on top of baseline and so-called “reciprocal” rates.

While Australia dodged the reciprocal tariffs earlier this year, it has not been able to escape levies of up to 50 per cent on steel and aluminium.

Opposition finance spokesman James Paterson on Thursday accused Labor of taking a “negligent and reticent approach” to dealing with Mr Trump.

Opposition finance spokesman James Paterson says Labor has taken a ‘negligent and reticent approach’ to the US relationship. Picture: Jason Edwards / NewsWire

“The only fair tariff rate on Australia is 0 per cent given the US-Australia Free Trade Agreement, given the US trade surplus with Australia, which has been a lifetime of trade surplus,” he told Sky News.

“But again, this is an issue where I’m really worried about the negligent and reticent approach that the government is taking.

“The Prime Minister should be over there making the case in person with the President of why Australia deserves an exemption, as (UK Prime Minister) Keir Starmer has successfully advocated for in relation to steel and aluminium.

“And I’m particularly worried about the reports today that pharmaceuticals could be hit with an enormous tariff.”

Australia exported some $2.2bn in pharmaceuticals to the US in 2024, making it the third-biggest export market for the country.

“It’s a very significant industry in Australia, which employs a large number of people,” Senator Paterson said.

“It is advanced, high-end manufacturing, which is a very lucrative industry and a very good trading relationship for both the United States and Australia, and if that were hit, then that will have a very profound effect, and we’re just not fighting enough to make sure that it doesn’t happen.”

‘Bipartisan’ backing for PBS

Earlier, fellow senior Coalition senator Bridget McKenzie said Pharmaceutical Benefits Scheme (PBS) has “bipartisan”.

The PBS is a list of federally subsidised medicines and compels foreign drugmakers to negotiate prices with the government – a deeply unpopular requirement among American companies.

Pharma lobbyists in the US have urged the Trump administration to consider using tariffs on Australia to weaken the scheme, but the Albanese government has been adamant the PBS is not on the table.

Senator McKenzie said it was a position the opposition shared.

Senior Coalition senator Bridget McKenzie says the PBS has ‘bipartisan’ backing in Canberra. Picture: Martin Ollman / NewsWire

“We’ve got a bipartisan approach to our PBS,” Senator McKenzie told Nine’s Today.

“It underpins our universal healthcare system and makes sure no matter who you are in Australia, you can access great, world-class leading drugs for your family’s health.”

She said the challenge was “about getting the right deal, not undermining our PBS, but also recognising we’re one of the world leaders in medical research”.

However she also criticised the Albanese government’s handling of the relationship with Washington, saying “the number of things we don’t get a heads up on with the US is appalling”.

“As we’ve been saying … for so long, over 240 days since the election in the US, our prime minister is yet to meet the President,” Senator McKenzie said.

“And that is having flow-on impacts right throughout our economy, not just the PBS with our biosecurity, the beef trade, the tariff issue, and now AUKUS.”

US President Donald Trump has threatened to slap a 200 per cent tariff on foreign pharmaceuticals. Picture: Nicolas Tucat / AFP

Earlier this year, the Pharmaceutical Research and Manufacturers of America (PhRMA) lodged a formal complaint with the Trump administration targeting several close US allies, including Australia.

“Egregious and discriminatory pricing policies in several markets including Australia, Canada, the European Union, Japan and Korea undervalue American innovation, threaten billions of dollars in lost sales and undermine American competitiveness, jobs and exports,” the peak body said at the time.

Another key concern is the timeline for PBS approvals, which is typically upward of 450 days.

American drugmakers would like that cut to 60 days.

Treasurer Jim Chalmers has vowed Australia the ‘PBS is not up for negotiation’. Picture: Martin OIllman / NewsWire

Asked on Wednesday if there was wriggle room to budge on the timeline, Jim Chalmers did not rule it out but firmly restated the government’s vow the “PBS is not up for negotiation”.

“When it comes to strengthening the PBS and making sure that it works better for Australians, obviously that’s an ongoing focus of the Health Minister, Mark Butler,” the Treasurer said.

“He’s always trying to work out how do we make sure the PBS as strong and effective, including cost‑effective, for Australians who desperately need these treatments and these medicines.”