US probes German drug prices, threatens tariffs

The United States has initiated an investigation into Germany's pharmaceutical pricing, alleging that American patients shoulder an unfair share of research and development costs. Jamieson Greer, the U.S. Trade Representative, announced the probe, citing a trade law that could justify imposing tariffs if the issue is not resolved.

Greer emphasized that months of discussions with the German government preceded the investigation, apparently without success. He pointed to a recent agreement reached with Great Britain in April, urging Germany to follow suit and engage in constructive negotiations to rectify the imbalance. This action is part of a broader effort by the Trump administration to lower high drug prices in the U.S., which has already led to tariffs against several countries and agreements involving production relocation.

The investigation draws on a provision from a 1974 U.S. trade law, a mechanism previously used to impose retaliatory tariffs on China. The U.S. also launched similar investigations against the European Union and other nations in March, citing structural overcapacity. This move comes after a significant U.S. Supreme Court ruling in February that invalidated many of Trump's tariffs, prompting the administration to seek new, albeit potentially temporary, trade tools.