Australia is sending the "clearest possible message" it won't succumb to pressure from big drug companies or the Trump administration over delivering cheaper medicines.
President Donald Trump imposed a new 100 per cent tariff overnight on patented pharmaceuticals imported into the US.
But that rate is reduced to 20 per cent for companies that move production to his country.
Australia's pharmaceutical benefits scheme, which subsidises prescription medicines and makes them cheaper, has long been in the sights of America's drug giants.
They have been angered at being forced to negotiate with the federal government over prices.
Health Minister Mark Butler said Australia will not back down on the scheme.
"We keep sending this clearest of possible messages to the US because we know they get the big drug companies in their ear trying to unpick the PBS here in Australia and equivalent schemes in other countries around the world," he told Seven's Sunrise on Friday.
"There is no way we're negotiating about those fundamental elements of the PBS, that have served Australia so well for 80 years, bringing the best medicines from around the world to Australian patients and keeping prices affordable."
The government's immediate concern was for Australian exporters and it will be working with those businesses to understand the impact on them and on jobs, Mr Butler said.
Australia sends about $2 billion worth of pharmaceuticals to the US each year, making it one of the nation's major exports to America.
Biotechnology company CSL welcomed the US exemption for blood plasma products in the new round of tariffs.
"The vast majority of our trade into the US are plasma therapies that are made entirely from US-sourced plasma and we recently announced plans to spend $1.5 billion to expand our plasma therapy manufacturing capabilities in the US," a spokesman said.
Opposition Leader Angus Taylor said the coalition supported free trade.
"It'll be important now for the government to work and seek and assert themselves to get exemptions to this for Australian exporters," he told Seven.
