Shares in pharmaceutical firms drop as Trump reveals fresh round of trade tariffs

Donald Trump has revealed a fresh round of trade tariffs on several key sectors, with the government confirming active engagement with the US on the most punitive rate threatened.

The US president used his Truth Social account last night to confirm that a new 100% tariff would apply to any branded or patented pharmaceutical product from 1 October.

He said that to escape the clutches of that duty, a company must have already broken ground on a new US factory.

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The UK government responded by confirming engagement with the Trump administration on the plans.

The president further confirmed that from the same date, a 50% tariff would be applied to all imported kitchen and bathroom cabinets, while upholstered furniture faced a 30% rate.

A 25% tariff faced shipments of heavy trucks.

Mr Trump did not say whether the duties would be lower for nations which have agreed trade deals with his administration, including the UK and European Union.

Each faces a blanket 10% and 15% rate on their exports, respectively, at the moment.

The UK's deal talked of intent to "promptly negotiate significantly preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients".

No subsequent agreement has been announced.

It leaves open the possibility that the new duties will be applied in line with other, higher, sectoral tariffs that are currently in place above the base rate, such as that for steel.

A UK government spokesperson said: "We know this will be concerning for industry, which is why we've been actively engaging with the US and will continue to do so over the coming days.

"Sectors such as pharmaceuticals are critical to our economy... so we will continue to press the US for outcomes that reflect the strength of our relationship and deliver real benefits for UK industry."

Ireland's foreign minister Simon Harris said he understood that his country - also a major pharma player - would face the 15% baseline rate under the terms of the US-EU trade arrangement.

"The reason for this is the large scale "FLOODING" of these products into the United States by other outside countries," Trump said in his post.

Shares in pharmaceutical firms listed in Asia fell sharply overnight as industry bodies rushed to seek clarification on the new rules.

Those for AstraZeneca (AZ) were down 1.4% at the open in Europe to top the losers on the FTSE 100.

GSK and Hikma Pharmaceuticals' stocks were also among the fallers.

However, values later recovered.

AZ - the UK's most valuable listed company - already has vast US manufacturing and research operations and believes it is exempt from the regime on the basis of that and its current construction pipeline.

In July, as the threat of tariffs loomed large, it revealed plans for $50bn of additional US investment by 2030 and recently cancelled a planned £200m project in the UK.

US figures show the country imported $233bn of drugs and medicines from abroad last year, with the UK accounting for around $6.5bn of that sum.

A 100% tariff rate, even on some of those shipments, risks ramping up the cost of US healthcare, according to critics of the president's approach.

By imposing the 100% tariff rate, Mr Trump wants to bring prices down through encouraging domestic production and secure hundreds of billions of dollars for taxpayers through tariffs at the same time.

US industry groups lined up to oppose the planned measures.

The Pharmaceutical Research and Manufacturers of America said non-US companies were continuing to announce hundreds of billions of dollars in new US investments. "Tariffs risk those plans," it said.

The US Chamber of Commerce urged a U-turn on any truck tariffs.

It said the five nations to be worst affected - Mexico, Canada, Japan, Germany and Finland - were "allies or close partners of the United States posing no threat to US national security."

Commenting on the 100% pharma tariff plan Nigel Green, chief executive of asset manager deVere Group, said the move undermined the very goal it claimed to serve.

"A tariff of this magnitude on high-value medicines will ripple through every part of the global health economy.

"Rather than sparking a manufacturing renaissance, it'll deter investment, heighten inflationary pressure and drive sophisticated capital to markets that remain open and predictable," he predicted.

(c) Sky News 2025: Shares in pharmaceutical firms drop as Trump reveals fresh round of trade tariffs