Investors shrug off Donald Trump’s 200% tariff threat on pharma

Investors shrugged off US President Donald Trump’s threat to impose a 200 per cent tariff on pharmaceuticals, betting that the levy is unlikely to be implemented. 

Shares in most big European drugmakers traded down on Wednesday but then recovered, with many trading flat or slightly up. Shareholders in India’s huge drugmaking industry, which supplies the US with about 40 per cent of generic drugs, also largely glossed over the threat. The S&P BSE Healthcare index, which tracks Indian pharma stocks, was little changed at the close of trading on Wednesday. 

Emily Field, an analyst at Barclays, said investors were brushing off the latest pharma tariff threat and dismissing it as “rhetoric”. 

“No one is taking it seriously,” she said. “The idea of the Taco trade [Trump always chickens out] still prevails.” 

The 200 per cent tariff “looks impractical” and “highly inflationary”, said a Mumbai-based pharma industry analyst. “I don’t think too many people have taken [it] very seriously.”

https://www.ft.com/content/f59f04f1-666f-4c7f-8054-43e00322811e