Day: 26 September 2025

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Trump’s Drug Tariffs: A protectionist prescription policy?

Trump's Pharma Tariffs

Trump’s latest tariff salvo is already rattling pharma stocks. Branded drugs now face a 100% levy unless firms build plants in the U.S.

Trump’s Drug Tariffs: A protectionist prescription policy?

In a move that’s rattled pharmaceutical markets across Asia and Europe, President Trump has announced a sweeping 100% tariff on branded, patented drugs imported into the United States—unless manufacturers relocate production to American soil.

The policy, unveiled via executive order, is part of a broader push to ‘restore pharmaceutical sovereignty’ and reduce reliance on foreign supply chains.

The impact was immediate. Asian pharma stocks tumbled, with major exporters in India, South Korea, and Japan facing sharp declines. It is uncertain how this will affect the UK.

European firms, already grappling with regulatory headwinds, now face a stark choice: invest in U.S. manufacturing or risk losing access to one of the world’s most lucrative drug markets.

Critics argue the move is less about health security and more about economic nationalism. “This isn’t about safety—it’s about leverage,” said one analyst. “Trump’s team is using tariffs as a blunt instrument to force industrial relocation.”

Supporters, however, hail the policy as long overdue. With drug shortages and supply chain fragility exposed during the pandemic, the White House insists the tariffs will incentivise domestic resilience and job creation.

Yet the devil lies in the dosage. Smaller biotech firms may struggle to absorb the costs of relocation, potentially stifling innovation. And with branded drugs often tied to complex global patents and licensing agreements, the legal fallout could be significant.

The symbolism is potent: medicine, once a universal good, is now a battleground for economic identity. Trump’s tariff salvo reframes pharmaceuticals not as tools of healing, but as tokens of sovereignty. Whether this prescription cures or corrupts remains to be seen.

U.S. President Donald Trump has also stated that said plans to impose a 25% tariff on imported heavy trucks from 1st October 2025.

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Stock market pullback in 4th quarter… how likely is it?

Taking Stock

While many investors are hoping for a year-end rally, several analysts are warning that a fourth-quarter pullback remains a real possibility.

Valuation concerns: Large-cap stocks are trading at historically high valuations, reminiscent of the 2021 peak. That leaves little room for error if economic data disappoints.

Tariff aftershocks: April’s ‘Liberation Day’ tariffs triggered a sharp sell-off, and although markets rebounded, strategists at Stifel expect an ‘echo’ effect—potentially a 14% drop in the S&P 500 before year-end.

Economic slowdown: Consumer spending is showing signs of strain, and real wage growth may not keep pace with rising prices. That could dampen demand and corporate earnings.

Trade uncertainty: The 90-day tariff pause expired in July 2025 (with adjustments), leaving markets to navigate the fallout—valuation echoes, trade uncertainty, and investor psychology now collide in Q4’s shadow. This could lead to headline-driven volatility through Q4.

Mixed sentiment: Some strategists remain cautiously optimistic, citing resilient labour data and hopes for more Fed rate cuts. But others warn that investors may be wishful thinking!

A U.S. stock market pullback is likely due in Q4 2025

The fourth quarter (Q4) of the calendar year runs from 1st October to 31st December. In financial and editorial contexts, it often carries symbolic weight—year-end reckonings, holiday spending, and final earnings reports all converge here.

A pullback is due, but when?