President Donald Trump announced a barrage of new tariffs on Thursday, aimed at pharmaceuticals, heavy trucks and home furnishings in particular, to shore up domestic industry in these sectors, and protect American manufacturers from “unfair outside competition.”
Large Scale ‘Flooding’ of Products Into The U.S.
The administration announced a 100% tariff on all imported branded or patented pharmaceuticals, which can be waived for those companies that have already begun constructing manufacturing plants in the United States.
See Also: Trump Tariffs Fueling Inflation, Warn Economists As 72% Of CPI Components Surge Past Fed’s Target: ‘Inflation Risks Are Rising’
Trump said the move is intended to reshore critical drug production and reduce the industry and the country’s dependency on foreign suppliers, according to a Reuters report.
Additionally, imported heavy-duty trucks and kitchen cabinets will be subject to a tariff of 25% and 50%, respectively, with an additional 50% levy on bathroom vanities and a 30% tax on upholstered furniture, effective next week. All tariff measures are set to take effect on October 1.
“The reason for this is the large-scale ';FLOODING' of these products into the United States by other outside Countries,” Trump said in a Truth Social post.
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Trump framed the tariff on trucks as a national security imperative, saying, “We need our Truckers to be financially healthy and strong, for many reasons, but above all else, for National Security purposes!”
He also cited the move as a boost for companies like PACCAR Inc. (NASDAQ: PCAR), which owns Peterbilt and Kenworth, as well as Daimler Truck Holding AG’s (OTC: DTRUY).
Industry Groups Push Back
The U.S. Chamber of Commerce opposed the truck tariffs, saying that the top five import sources for the industry are Mexico, Canada, Japan, Germany, and Finland, all of which are “allies or close partners of the United States,” and thus, pose “no threat to U.S. national security.”
The Pharmaceutical Research and Manufacturers of America has similarly come out against the new tariffs on drugs, saying that of the $85.6 billion in ingredients used in medicines consumed in the U.S., 53% was manufactured domestically, with the rest coming from Europe and other allies.
Stocks Move In Overnight Trade
Trump’s announcement led to significant movements in affected stocks during overnight trading, largely depending on their respective exposures to tariffs and imports.
| Stock | Industry | Impact | Price Action | Comments |
|---|---|---|---|---|
| PACCAR Inc. (NASDAQ: PCAR) | Trucking | Positive | +6.15% | Trump explicitly cited Paccar. Domestic production may gain share if imports face 25% tariffs. |
| Allison Transmission Holdings Inc. (NYSE: ALSN) | Trucking | Negative | +0.52% | Imports components and sells drivetrains into heavy-duty markets. Tariffs could raise costs. |
| HNI Corp. (NYSE: HNI) | Furniture | Positive | -0.02% | U.S.-based manufacturer of office and home furniture. Benefits if imports are taxed. |
| RH (NYSE: RH) | Furniture | Negative | -4.54% | Premium furniture retailer with international sourcing, directly exposed to higher tariffs. |
| Novartis AG (NYSE: NVS) | Pharmaceuticals | Negative | -1.08% | Massive U.S. market exposure, with significant reliance on imports. |
| Perrigo Company PLC (NYSE: PRGO) | Pharmaceuticals | Positive | -0.05% | Heavy reliance on generics could be a positive. |
Photo Courtesy: Miha Creative on Shutterstock.com
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