Can Trump impose tariffs on Chinese drugs?

According to The Hill, President Trump’s tariffs on China are in place and hitting all products imported from the country — including a number of pharmaceuticals that Americans rely upon.

Chinese imports account for a significant proportion of US prescriptions and over the counter drugs. Many of the Chinese-produced medicines are generics, which account for 91 percent of prescriptions dispensed in the United States.

“The Chinese market is a key supplier for key starting materials and Active Pharmaceutical Ingredient (API) to the generic supply chain,” said John Murphy, president and CEO of the Association for Accessible Medicines (AAM). 

“I will say they’re sort of less important any longer for the actual finished fill and final manufacturing,” Murphy noted. “But really, it’s the rare minerals, the key starting materials which are obviously critical to the supply chain.” 

Stakeholders were hopeful that medications would be spared from tariffs. Some noted that the US is a signatory to the World Trade Organization’s (WTO) 1994 Agreement on Trade in Pharmaceutical Products which calls for the elimination of tariffs on many pharmaceutical products. China has vowed to sue over the 10 percent tariffs, which it says are in violation of WTO rules. 

But a White House official said no exceptions are planned, and the administration will not be recognizing the WTO agreement. 

The country’s dependence on China to maintain pharmaceutical supply chains has long been an issue that lawmakers on both sides of the aisle have sought to address.

In 2018, the US-China Economic and Security Review Commission noted that the country was “heavily dependent” on drugs and API originating from China.

A 2023 analysis from the Atlantic Council found that the value of Chinese-imported APIs has continued to grow in recent years. 

According to Monica de Bolle, a senior fellow at the Peterson Institute for International Economics, the US isn’t unique in its dependence on China for drugs, noting that the European Union is similarly reliant.   

De Bolle said China’s dominance in the market grew as it sought to enhance its drug producing capacity while US pharmaceutical companies turned to other manufacturing pursuits. 

“What happened is that we developed this huge biotech sector where we have a lot of stuff going on,” said de Bolle. “The manufacturing market just turned to producing these more sophisticated drugs; the stuff that’s used in treatments, the stuff that’s going through clinical trials.” 

“That’s why we went from, you know, producing a lot of these things to not producing many of these things and buying them from elsewhere. And elsewhere eventually became China,” she added. 

The margins for manufacturing generic drugs are razor-thin, and any disruptions to the supply chain are apt to cause shortages or delays. 

“That additional 10 percent tariff is going to have a fairly significant impact on the cost of goods for the generic and by a similar supply chain,” said Murphy. “We don’t hold massive stockpiles of generic drugs in the United States. It’s a fairly just-in-time inventory.” 

According to Murphy, some manufacturers may find it economically unviable to produce generic drugs, resulting in shortages. 

Across all industries, analysts have warned that increased costs brought on by tariffs will be passed to consumers. But some manufacturers may instead drop out of the market entirely rather than pass on costs, partly due to a key provision in the Inflation Reduction Act (IRA).

As part of its cost-cutting measures, the IRA included a provision that requires drug makers to pay Medicaid a rebate if the price of their drugs rises faster than the rate of inflation.  

Tom Kraus, vice president of government relations at the American Society of Health-System Pharmacists, said incurring that penalty on top of tariffs could mean more than just shortages. 

“You’ve got to sort of factor in paying that penalty, which is going to make you less profitable or you’re going to have to drop out of the market,” said Kraus. 

He noted that group purchasing organizations, companies that help hospitals and pharmacies buy drugs and save money, may decide that manufacturers whose products originate from China are too expensive and turn away from them entirely. 

 

 

Saudi Navy taking part in AMAN-25 Exercise in Pakistan

The Royal Saudi Navy is participating in the joint naval exercise titled “AMAN-25,” which started in Karachi, Pakistan on Friday, as part of its efforts to enhance international cooperation in maritime security.

Naval forces from as many as 60 countries are taking part in the five-day multinational maritime exercise, which aims to strengthen global collaboration in combating piracy and terrorism while improving security coordination among the participating naval forces.

The 9th edition of the naval drill, organized by the Pakistan Navy, focuses on safeguarding economic waters, sharing expertise, enhancing combat readiness, and preparing participants for complex maneuvers and counter-techniques.

The Royal Saudi Navy is participating in the exercise with two war ships –HMS Jazan and HMS Hail- along with specialized forces from the Marine Corps and the Royal Navy’s Special Security Units.

Pakistan on a path of implosion

It was what one may safely describe as a ‘memorable’ occasion. Exactly a year ago today, adult-aged Pakistanis from all faiths, cultures, ethnicities, and socioeconomic classes had headed to their assigned polling stations to cast their ballots in a much-delayed general election.

 was remarkable how many expectations they ended up defying that day. One recalls the unannounced blackout of all mobile communication services, enforced by the authorities shortly before polls opened, which had left people without access to vital election-related information and unable to contact their friends and families.

It was not enough to deter the over 59 million citizens’ intent on having their voices heard that day. One also recalls the smug predictions of television pundits and the surveys fed to the media in the run-up to Election Day. None of them prepared the nation for the coup ordinary Pakistanis pulled off merely with the help of a stamp and a ballot paper.

No observer can honestly deny that the last election’s results were highly unexpected.

Considerable effort was made to keep one party out of the race. The party’s leadership was jailed, its workers picked up, its electoral symbol withdrawn, and its candidates, even after being forced to declare themselves independents, not allowed to campaign.

If the previous elections were manipulated — perhaps by the same elements — to bring the PTI to power, they went out of their way to ensure that it did not have any chance this time around.

Despite all their machinations, however, the PTI ended up winning an unexpectedly large chunk of the popular vote.

The results announced two things: one, that Pakistan’s youth had finally arrived on the political scene, and two, that ordinary voters had overwhelmingly rejected the narratives set by the powers of the day. In this sense, the 2024 election was indeed a historic one.

Much went wrong after February 08, 2024, mainly because responsible individuals within the Pakistani state refused to come to terms with the country’s changed realities.

However, though the injustices that followed the last general election cannot be forgotten, it is equally important to start thinking about what must now be done to mitigate their effects.

The country has continued to march on a path of implosion, unable to contain the dissonance created by a conflict between what those controlling the state want and what the people want for themselves. Unless this fundamental conflict is resolved, the country will not be at peace with itself.

A war of egos has been fought between a handfuls of individuals at the cost of the well-being of millions of ordinary Pakistanis. This unnecessary war must be called to an end. The people of Pakistan have been wronged for too long. They need a change.

Dawn Editorial, February 08, 2025

Aman-25 focuses regional cooperation

The picturesque seafront of the Pakistan Navy Dockyard with windsurfers, sailboats and Navy boats painted a beautiful backdrop for the flagpoles from which fluttered the flags of 60 nations participating in the ninth Multinational Maritime Exercise ‘Aman-25’ on Friday morning.

The biennial exercise commenced with a formal flag-hoisting ceremony, followed by the cutting of a cake by senior representatives of the participating navies.

A message from the Chief of Naval Staff, Admiral Naveed Ashraf, was read by Commodore Omar Farooq during the ceremony.

The naval chief welcomed the participants and highlighted that the exercise, which began in 2007, has now become a regular biennial feature, bringing together regional and ex­tra-regional navies to foster a secure and conducive maritime environment.

He emphasized the Pakistan Navy’s role as a key stakeholder in the Arabian Sea and its initiatives to enhance regional maritime security, including Regional Maritime Security Patrols.

He further stated that in recognition of the international community’s trust in its efforts to promote peace and stability at sea, Pakistan Navy has introduced the Aman Dialogue this year as an adjunct to the exercise.

Speaking on the occasion, Pakistan Fleet Commander Rear Admiral Abdul Munib underscored the force’s contributions to collaborative maritime security and the exercise’s significance in enhancing interoperability among the participants.

Rear Admiral Munib praised the participating countries for supporting Pakistan’s commitment to peace and maritime security and expressed the hope that the friendships fostered during the exercise would continue and grow.

The ninth edition of the exercise will see the participation of 12 naval ships, some of which have already arrived at the Karachi port while others are on their way.

China, with its Plans Baotou-133 and Plans Gaoyouhu, and the Kingdom of Saudi Arabia, with its HMS Jazan and HMS Hail ships, are the nations participating with two vessels each.

The other vessels include UAE’s Abu Dhabi (CVT) P-191, Malaysia’s KD Terengganu-174, Japan’s JS Murasame, Sri Lanka’s SLNS Vijayabahu, Indonesia’s KRI Bung Tomo-357, Iran’s Jamaran, Bangladesh’s BNS Somdura Joy, USA’s Lewis B. Puller and Oman’s RNOV Sadh. Meanwhile, Turkiye is participating with one aircraft.

There are also a number of special operation forces and observers taking part in the inaugural Aman Dialogue scheduled for February 09 to 10.

Bangladesh’s Chief of Naval Staff Admiral Nazmul Hassan, who arrived with his naval fleet, held meetings with Pakistan’s top military leadership on Friday in another sign of the improved bilateral ties between the two nations.

Admiral Hassan, who will also attend the inaugural Aman Dialogue on maritime security, called on the chairman of the Joint Chiefs of Staff Committee, Gen Sahir Shamshad Mirza and Chief of Army Staff Gen Asim Munir.

He also held a bilateral meeting with Admiral Ashraf at the Naval Headquarters in Islamabad.

The meetings focused on the evolving regional security landscape and mutual strategic interests, particularly in maritime collaboration.

Both militaries explored avenues to strengthen defence ties, including joint naval exercises, training programs, and exchange visits.

Adm Hassan’s visit marks the second high-level engagement between the Bangladeshi Armed Forces and Pakistani military leadership in recent months.

On January 14, Lt Gen S.M. Kamrul Hassan, the principal staff officer of Bangladesh’s Armed Forces Division, led a military delegation to Pakistan, where both sides agreed to bolster defence cooperation and collaborate on regional peace efforts.

Observers see these developments as a shift in Bangladesh-Pakistan relations after years of estrangement.

Bangladesh’s participation in Pakistan’s multilateral naval exercise is considered a major step forward in military cooperation.

 

PSX index records 3.4%WoW decline

Pakistan Stock Exchange (PSX) endured bearish sentiments throughout the week due to a lack of imminent triggers. The benchmark index recorded its second-highest correction of the year in percentage terms, losing 3,933 points or 3.4%WoW to close at 110,323 points on Friday, February 07, 2025.

The decline was mainly driven by higher dividend-yielding sectors, including Fertilizer, E&P, and Banks, as stocks prices corrected adjusting their dividend yields in line to rising secondary yields.

Notably, in the last T-Bills auction, cutoff yields increased, taking 12-month yields to 11.59%, as investors reacted to a lower-than-expected policy rate cut and opted to wait for the IMF review.

Trade deficit widened by 18%YoY to US$2.3 billion in January 2025, driven by a 10%YoY rise in imports.

On a positive note, inflation eased to a nine-year low of 2.4%YoY in January.

The Sindh and Baluchistan assemblies passed the agriculture income tax bill during the week, complying another IMF condition ahead of the upcoming review.

President Asif Zardari's visit to China generated positive sentiment, with discussions on CPEC Phase-II continuing to unfold.

Market participation declined, with average daily traded volume falling 13%WoW to 434 million shares, from 498 million shares in the earlier week.

On a positive note foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by US$46 million to US$11.4 billion as of January 31, 2025.

Other major news flow during the week included: 1) Pakistan and SFD sign US$1.61 billion agreements to boost economic cooperation, 2) FBR faces PKR468 billion shortfall in 7MFY25 revenue collection, 3) sales of POL rise 4%YoY in the first seven months of the current financial year, 4) Cement dispatches increased by 14%YoY in January, and 5) POL price were increased in the last fortnightly review.

Among the various sectors only REIT was a positive performer, while Refinery, Transport, OMC, E&P, and Technology sectors witnessed erosion in value.

Major selling was recorded by Mutual Funds with a net sell of US$5.5 million, barring sale of 6.0% stake of PKGS by Enso AB. Individuals absorbed most of the selling with a net buy of US$7.9 million.

Top performing scrips of the week were: SAZEW, AICL, NPL, MUGHAL, and INIL, while laggards included: ENGROH, MTL, POL, PTC, and ATLH.

According to AKD Securities, the market outlook remains positive, with the market expected to largely being driven by specific scrips and sectors, following any trigger or corporate results.

The upcoming MSCI review next week could serve as a potential catalyst for market sentiments. Over the medium term, the benchmark index is anticipated to sustain its upward momentum through CY25, primarily driven by the strong profitability of Fertilizer companies, higher sustainable RoEs of Banks and improving cash flows of E&Ps and OMCs, benefitting from falling interest rates.

 

 

Kashmir Question

Almost eight decades since Pakistan and India became sovereign states, the Kashmir issue remains unresolved, bedevilling ties between the neighbours, with the people of the disputed region unable to exercise their right to self-determination.

Moreover, since the events of August 2019, India has tightened its grip over the occupied territory, removing the limited rights the held region had under the Indian constitution. Though, the hardline BJP government may think the Kashmir dispute is a thing of the past, the fact is that the territory remains internationally disputed, and no amount of constitutional tinkering and attempts to alter occupied Kashmir’s demography by New Delhi can change this reality.

The BJP government may like the world to think that it has transformed held Kashmir into a proverbial heaven on earth, but the dark reality of the Indian occupation cannot be hidden.

While Pakistan has long been raising the Kashmir issue at international forums, neutral observers, too, have pointed out the Indian state’s excesses in the disputed region.

For example, Human Rights Watch has said that journalists in IHK remain vulnerable to state violence, including physical assault and the threat of “fabricated criminal cases”. It adds that “hundreds of Kashmiris”, including journalists and human rights activists, remained in detention.

On the other hand, Amnesty International has also criticized India’s “arbitrary detentions” and “stringent anti-terror laws” in IHK. It also says that repression in the region has escalated since Article 370 was scrapped in 2019. These descriptions are a mere glimpse of the ugly reality of the occupied region.

The fact is that the only principled and peaceful solution to the Kashmir dispute remains the plebiscite the UN Security Council called for in 1949, after India had taken the Kashmir case to the world body.

Over the decades, no Indian government has taken any serious steps to implement the UN’s resolution, with the result that the Kashmir dispute has become a source of permanent discord in the subcontinent.

However, until there is a long-term solution in light of the aforementioned resolution, an alternative option for peace in Kashmir and the entire subcontinent would be the implementation of the four-point plan hammered out during the Musharraf era.

That scheme envisaged a ‘soft’ LoC, with free movement of people and goods across Kashmir, and eventual demilitarization.

If both sides, particularly India, are serious about peace, reviving this formula could be the starting point for fresh negotiations. The important thing is to continue the dialogue process, on bilateral disputes as well as the Kashmir issue, and move beyond rigid positions.

On Kashmir Solidarity Day today, Pakistan should reaffirm its support for the people of Kashmir. It should also keep the door open for India in case it decides to resolve the Kashmir question through dialogue.

Dawn Editorial of February 05 2025

 

 

Improving Iran-Pakistan bilateral relations

Reportedly, Iranian Foreign Minister Abbas Araghchi and Pakistan's Deputy Foreign Minister Amina Baloch discussed bilateral ties and regional developments. The meeting took place in Tehran, on the sidelines of the Economic Cooperation Organization (ECO) meeting.

"Under President Pezeshkian's leadership, we aim to elevate our relationship with Pakistan. We recognize its significant role in our foreign policy," Araghchi stated.

He further highlighted the importance of sustained dialogues and interactions at the highest levels to capitalize on shared opportunities while tackling common challenges.

Baloch, reflecting on mutual interests and concerns, emphasized issues such as border security, drug trafficking, and illegal migration.

"Pakistan is committed to advancing the relationship with Iran. We aim for more robust cooperation both bilaterally and regionally to manage these shared challenges," she explained.

The meeting also provided an opportunity for the diplomats to discuss regional developments, including the situation in Afghanistan, Gaza, Syria, and Lebanon.

Iran and Pakistan have historically maintained cordial ties. They share deep cultural and historical links and routinely support each other in international forums. Recent developments have further strengthened this close partnership.

In early 2024, the two countries demonstrated impressive diplomatic resolve by swiftly de-escalating border tensions through dialogue, leading to the inking of important security and military agreements in the ensuing months. Since then, significant efforts have been carried out to combat cross-border terrorism and ensure the security of the Iran-Pakistan border. 

The visit of Major General Mohammad Bagheri, the chief of staff of the Iranian Armed Forces, to Pakistan in early 2025 further solidified the two nations’ commitment to security and military cooperation.

Economic collaboration has also seen positive momentum in recent years, with several huge projects like the Iran-Pakistan (IP) Gas Pipeline underway. 

The visit of the late Iranian President Ebrahim Raisi to Pakistan in April 2024 marked a new chapter in economic engagements, with agreements signed to elevate bilateral trade to US$10 billion over the next five years.