Asian pharma stocks suffered a crushing blow. This decrease came after former President Donald Trump’s tariff on branded and patented pharmaceutical goods. Beginning October 1, a 100% duty will be placed on all targeted products. Companies can pass this responsibility by establishing drug manufacturing plants in the United States.
Trump shared the news via a post on Truth Social. This represents a big step up in trade hostilities in the pharma space. Asian pharmaceutical companies’ shares slid after the news, with Hong Kong-listed companies down big too. South Korea’s largest pharmaceutical stocks felt the sting. Samsung Biologics fell 1.71%, while SK Bio Pharmaceuticals tumbled 3.71%.
This latest round of tariffs is just one component of a massive package of actions that Trump has taken. Currently, these tariffs extend far beyond the cost of pharmaceuticals. Far worse, wood and upholstered furniture now face a 30% tariff. Furniture, kitchen cabinets, bathroom vanities and similar products now face a 50% tariff. Yet the ostensible purpose behind these tariffs is to increase domestic manufacturing. They help drive private sector investment by nudging companies to establish manufacturing hubs in Korea.
Trump signed an executive order to support TikTok’s continued operation in the United States. We can’t directly attribute this development to the pharmaceutical tariffs. It’s a reminder of Trump’s pernicious legacy on the tech and trade front. The executive order acknowledges that this is an overestimation of TikTok’s business value to the tune of about $14 billion.
Market analysts are waiting to see how these new announcements take shape. They are especially keen on the impacts concerning the pharmaceutical industry and wider economic conditions across Asia. Pharma stocks are crashing. This decrease comes after last week’s consumer price index from Tokyo, often viewed as a bellwether for Japan’s overall inflation picture, that surprised markets with a further decline. Tokyo’s headline inflation remained steady at 2.5% in September, while core inflation figures came in softer than anticipated at 2.5%, falling short of economists’ expectations of 2.8%.
The financial markets leapt to life as fresh news hit the street. Initial claims for new unemployment insurance came in slightly lower than expected, so the market overreacted. This has led to a spike in the 10-year Treasury yield. It has since reached a peak of 4.2% as investors weigh the implications of domestic and global economic developments on growth prospects.