Trump Targets Pharmaceuticals

[Ben Graham]

Yesterday, the U.S. stock market experienced a major sell-off, and the American dollar strengthened after U.S. President Donald Trump announced a new package of tariffs on pharmaceutical products, heavy trucks, and furniture, including a 100% tariff on patented drugs—unless the drug manufacturer builds a production facility in the United States.

This decision sparked a wave of criticism from pharmaceutical companies and trade partners, who called it a protectionist measure that could cause significant harm to global trade and make it harder for patients to access essential medications. Industry representatives voiced concerns about the potential increase in drug prices and a decline in innovation within the pharmaceutical sector. Investors reacted nervously, fearing the onset of a new trade war. Shares of pharmaceutical companies plummeted, and the tech sector—which heavily relies on global supply chains—also suffered negative impacts.

"Starting October 1, 2025, we will impose a 100% tariff on any branded or patented pharmaceutical product unless the company is building its pharmaceutical plant in America," Trump wrote on social media Thursday. "Therefore, if construction has already begun, those pharmaceutical products will not be subject to the tariff."

Trump's statement was one of several relating to new industry-specific tariffs set to take effect next Wednesday. Imported heavy trucks will be subject to a 25% tariff, kitchen cabinets and bathroom vanities to a 50% tariff, and imported upholstered furniture to a 30% tax.

Trump's posts contained no further details. The pharmaceuticals plan described by the president may include broad exemptions for companies operating in the United States. The White House has not yet commented on the matter.

According to Bloomberg, the levy on branded pharmaceutical products could raise the average U.S. customs duty by 3.3 percentage points, though this impact could be offset by exemptions for companies building domestic production capacities. Singapore and Switzerland are among the most affected, though the United Kingdom also exports a substantial portion of pharmaceuticals to the U.S. Analysts note that in the trade agreement with the U.S., it was mentioned that special rates would be considered in the event of a new Section 232 tariff, but no officially agreed rate has been reached. A similar approach appears to be applied to Japan.

The Trump administration is also reportedly considering a plan to reduce U.S. dependence on foreign semiconductor manufacturing. According to media reports, the administration will push for companies to produce as many chips in the U.S. as they do overseas.

As for the current technical outlook for EUR/USD, buyers now need to target the 1.1710 level. Only a break above that will open the way to test 1.1740. From there, a climb to 1.1770 is possible, though achieving this without support from major players will be quite difficult. The furthest target is the 1.1820 high. In the event of a decline, significant buyer activity is expected around the 1.1660 level. If no support is found there, it would be advisable to wait for a test of the 1.1615 low or open long positions from around 1.1575.

Regarding the current technical picture for GBP/USD, pound buyers need to break the nearest resistance at 1.3380. Only that will allow them to aim for 1.3420—breaking above which could prove quite difficult. The furthest target is the 1.3460 level. In the event of a drop, bears will try to reclaim control of the 1.3325 level. If successful, a break of this range would seriously damage the bulls' positions and send GBP/USD to a low of 1.3280, with a potential move towards 1.3240.

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