Pharmaceutical Stocks Slide as Trump Unleashes 100% Tariffs

UK and global pharma companies rattled by new US trade rules — investors face fresh uncertainty

Pharmaceutical Industry Faces Major US Tariff Blow

The global pharmaceutical sector was shaken after former US President Donald Trump announced a sweeping 100% tariff on branded or patented pharmaceutical products imported into the US, effective 1 October. The move sent pharma shares sliding in early trading, particularly impacting firms based in the UK, Ireland, and wider Europe.

Tariffs Trigger Market Jitters

• Shares in AstraZeneca opened down 1.4%, leading FTSE 100 fallers.
• GSK and Hikma Pharmaceuticals also recorded early losses.
• Asian pharmaceutical stocks also declined sharply overnight.

The announcement, made via Trump’s Truth Social platform, warned that only pharmaceutical companies that had already begun building new factories in the US could avoid the 100% levy.

Trump’s Tariff Plans: What's Changing?

Trump’s tariff escalation includes:

• 100% tariff on all branded/patented pharmaceutical imports.
• 50% tariff on imported kitchen and bathroom cabinets.
• 30% tariff on upholstered furniture.
• 25% tariff on heavy truck imports.
• Ongoing 10–15% base tariffs for UK and EU exports remain in place.

While the Trump administration claims the tariffs aim to reduce reliance on foreign goods and boost US manufacturing, critics argue they will raise drug prices for American consumers and disrupt the global healthcare supply chain.

UK Trade Deal Leaves Room for Risk

Though the UK-US trade agreement had ambitions to negotiate "preferential treatment" for pharmaceutical products, no final deal has been secured, leaving UK firms exposed to the full brunt of the tariff.

Ireland — another major pharma hub — is also expected to face a 15% base rate under EU trade terms.

Trump justified the move by stating the US was being "flooded" with pharma imports, saying the tariffs would secure hundreds of billions in revenue for the country.

Industry Reaction and Investor Concerns

The Pharmaceutical Research and Manufacturers of America warned that tariffs could jeopardise billions in planned US investments by non-US firms.

Nigel Green, CEO of deVere Group, strongly criticised the move:

“Rather than sparking a manufacturing renaissance, it’ll deter investment, heighten inflationary pressure, and drive capital to more stable markets.”

The US Chamber of Commerce also expressed concern over broader tariff implications, urging a reconsideration, particularly on the proposed truck duties.

What It Means for Investors

For investors, the immediate reaction has been cautious. Pharmaceutical stocks are often considered defensive, but these tariffs introduce:

• Increased regulatory and political risk for multinational drugmakers.
• Short-term share price volatility, especially for firms with limited US production.
• Longer-term uncertainty around global supply chains and healthcare costs.

Outlook: Tariffs and Pharma Market Value

• AstraZeneca, with $50bn investment plans in the US, may partially avoid penalties, but its stock is still reacting negatively.
• The UK exported $6.5bn worth of pharmaceutical products to the US last year — a significant figure at risk under the 100% tariff rule.
• Investors should watch for clarity on how these tariffs will be implemented and whether exceptions or negotiated adjustments emerge.

Conclusion: Investor Strategy Moving Forward

The move by Trump signals a more protectionist stance on high-value imports, with the pharmaceutical sector squarely in the firing line. Investors should prepare for increased volatility, potential supply chain rerouting, and a re-evaluation of pharmaceutical exposure in global portfolios.

If the tariffs are fully enforced, expect share price declines to continue, particularly for UK- and EU-based pharma exporters without US manufacturing capabilities. However, companies with robust US infrastructure — or those pivoting quickly — may weather the storm better.

Sources: (SkyNewsBiz.com)