Pharma Panic! Stocks Dive Up to 6% as Trump Threatens 'Never Seen Before' Tariffs

US President Donald Trump said that he has a surprise for the pharma sector. Speaking to reporters on Air Force One, Trump said tariffs on US pharma imports will be at levels never seen before. Following this, the shares of Indian pharma companies, including Aurobindo Pharma, IPCA Laboratories and Lupin, fell by nearly 6% on Friday. 

“Pharma tariffs are going to come in at levels you haven’t really seen before. We are looking at pharmaceuticals as a separate category. We will be announcing that sometime in the near future, and not too distant future,” said the US President. The level of tariff to be imposed on the sector is still under consideration, he added.

The President’s administration is reviewing pharma and semiconductors under Section 232 of the Trade Expansion Act, 1962 before making a decision regarding tariff imposition. 

The share of Aurobindo Pharma nosedived by 6% to 1,105 at the end of the closing day on April 4 on the national stock exchange (NSE). IPCA Laboratories followed a similar trend, the share went down by 6% to Rs 1,407.55 and Lupin’s share dipped 6% to Rs 1,969.  

Gland Pharma’s share went down by 5.42% to Rs 1,475. Cipla stock nosedived by nearly 6% to Rs 1,416. 

This comes just two days after the White House, in a factsheet, mentioned that sectors, including steel/aluminum, autos/auto parts, and pharmaceuticals will not face reciprocal tariffs. 

“Some goods will not be subject to the Reciprocal Tariff. These include...(3) copper, pharmaceuticals, semiconductors and lumber articles,” said the White House. 

However, Trump imposed 25% tariffs on automobiles and auto components on imported vehicles. The Motor Equipment Manufacturers Association (MEMA) of the USA said that the tariff will be applied to imported passenger vehicles such as sedans, SUVs, crossovers, minivans, cargo vans and critical auto parts like engines, transmissions, powertrain components, and key electrical parts.