Tariff Photo:VCG

US President Donald Trump's announcement of initially "small tariffs" on pharmaceutical imports, which will be eventually scaled up to rates as high as 250 percent, are unlikely to contribute to the stated aim of channeling manufacturing back to the US, a Chinese analyst said.

The high tariffs on sectors such as pharmaceuticals and semiconductors will disrupt international supply chains and harm US companies' innovation abilities, Li Haidong, a professor at the China Foreign Affairs University, told the Global Times.

Trump said in an interview with CNBC on Tuesday (US time) that the US would initially place a "small tariff" on pharmaceutical imports before hiking it to 150 percent within 18 months and eventually to 250 percent in an effort to boost domestic production.

The comment on Tuesday followed statements last month and in February, during which he claimed that pharmaceutical tariffs could range between 25 percent and 200 percent, according to Reuters. 

Trump said on Tuesday that he plans to announce tariffs on semiconductors and chips in the "next week or so," but gave no further details.

The high tariffs have raised concerns among US drug companies over their impacts on costs and innovation.

Alex Schriver, senior vice president of public affairs at PhRMA, the main lobbying group for the industry, said in an emailed statement to the Global Times on Thursday that the industry shares President Trump's goal to revitalize American manufacturing and recently announced hundreds of billions of dollars in new US investment, but every dollar spent on tariffs is a dollar that cannot be invested in American manufacturing or developing future treatments and cures. 

He added that tariffs on medicines can increase costs and lead to shortages.

In May, with regard to the US Department of Commerce's Section 232 investigation of pharmaceuticals and pharmaceutical ingredients imported into the US, PhRMA said in a statement that tariffs on the biopharmaceutical industry would threaten continued investment and medical progress.

Tariffs on medicines and their inputs would not enhance national security, PhRMA said.

Li said that the two sectoral tariffs are aimed at ensuring US leadership in the pharmaceutical and semiconductor sectors, with specific aims to bring down US drug costs in the former and maintain US technology hegemony in the latter.

However, although a number of companies have pledged to increase investment and expand their manufacturing footprints in the US, the eventual effect of using tariffs to force companies to move production back to the US is questionable, due to companies' profit-driven decision-making, Li said.

In comparison, the disruptive effect for the global pharmaceutical supply chain and damage to US pharmaceutical companies' innovation ability is more certain, Li said, as companies face higher costs in producing in the US.