(April 9): US President Donald Trump said his long-promised tariffs on pharmaceutical drugs will be coming soon, the latest signal that he plans to press ahead with more sectoral tariffs despite market fallout from his global levies.

“We are going to be announcing very shortly a major tariff on pharmaceuticals,” Trump said on Tuesday at a fundraising gala for House Republicans, without providing details on the planned levy.

“Once we do that, they are going to come rushing back into our country, because we are the big market,” Trump said. “The advantage we have over everybody is that we are the big market.”

Trump has long bemoaned a lack of domestic pharmaceutical production and has repeatedly promised tariffs to bring more capacity into the country.

An index of European health care companies dropped to a two-and-a-half-year low on Wednesday, with shares in AstraZeneca plc, Novo Nordisk A/S and Roche Holding AG falling around 7% before paring losses. 

A lack of information about the place of manufacturing of drug components makes any assessment of the impact of potential tariffs challenging, analysts John Murphy and Sam Fazeli from Bloomberg Intelligence said in a note. But companies with the lowest gross margins could face the biggest adverse earnings impact, they said, pointing to Bristol-Myers Squibb Co, Pfizer Inc and Sanofi SA.

His administration has signalled that they will use so-called section 232 powers to enact the levies, though they haven’t launched the prerequisite investigation. “We will be announcing pharmaceuticals at some point in the not too distant future,” Trump said on March 24. “We don’t make pharmaceuticals anymore, and if we have problems like wars or anything else, we need steel, we need pharmaceuticals.”

Trump has already applied 25% sectoral tariffs on steel, aluminium and automobiles, while launching the process to also enact them on copper. In addition to pharmaceutical drugs, his administration has separately pledged additional sectoral levies including on lumber and semiconductor chips, though timing and details are unclear. 

Trump’s sweeping “reciprocal” tariffs announced last week, which have sapped trillions in value from American markets, exempted sectors that either already have, or may soon have, their own levies.

Uploaded by Tham Yek Lee