Even as President Donald Trump paused the reciprocal tariffs for 90 days on Wednesday, he later confirmed in a conversation with reporters at his Oval Office that pharmaceutical companies would face tariffs.
What Happened: The rally in pharma stocks was short-lived after the stocks reversed course on Thursday. When a reporter asked President Trump if he would go ahead and levy tariff duties on pharmaceutical stocks, he said, “Yeah, well, I will be because we want them coming back.”
“You know, we realized during COVID-19 that we don’t make our drugs and our pharmaceuticals in this country. So, I realized that, and it was a big realization,” he added.
Citing the emergency during COVID-19, he stated that he wanted the pharma companies to produce drugs in the U.S.
“We had to go to China to get drugs, we had to go to other places, we don’t make it. That’s because we let them leave, and now if they want to come back, we’re going to put tariffs on the pharmaceutical companies, and they’re going to all want to come back,” Trump said.
The pharma stocks tumbled on Thursday after Trump’s confirmation of tariffs.
| Pharma Stocks | Thursday’s Performance | YTD Performance | One Year Performance |
| Eli Lilly And Co. LLY | -4.35% | -7.35% | -5.09% |
| AbbVie Inc. ABBV | -3.14% | -2.92% | 3.99% |
| Bristol-Myers Squibb Co. BMY | -6.10% | -11.15% | 2.73% |
| Regeneron Pharmaceuticals Inc. REGN | -5.26% | -23.60% | -40.63% |
| Pfizer Inc. PFE | -3.87% | -18.87% | -18.03% |
| Gilead Sciences Inc. GILD | -3.66% | 10.36% | 47.71% |
| Merck & Co Inc. MRK | -5.32% | -21.80% | -38.53% |
| Amgen Inc. AMGN | -3.33% | 8.54% | 4.23% |
| Johnson & Johnson JNJ | -1.51% | 3.24% | -0.07% |
Why It Matters: Despite a 90-day pause on reciprocal tariffs, base global tariffs of 10% and China tariffs of 125%, along with sector-specific tariffs of 25% on steel and aluminum, auto, and auto parts remain in place. Adding to it, the President hinted that he could soon announce tariffs on pharmaceutical companies.
Here are some of the pharmaceutical industry-linked exchange-traded funds that could be impacted.
| Pharma ETFs | YTD Performance | One Year Performance |
| VanEck Pharmaceutical ETF PPH | -7.02% | -7.51% |
| iShares US Pharmaceuticals ETF IHE | -7.04% | -6.08% |
| Invesco Pharmaceuticals ETF PJP | -10.13% | -4.37% |
| SPDR S&P Pharmaceuticals ETF XPH | -14.05% | -11.45% |
| KraneShares MSCI All China Health Care Index ETF KURE | 2.88% | 0.35% |
| First Trust Nasdaq Pharmaceuticals ETF FTXH | -11.54% | -10.18% |
| Direxion Daily Pharmaceutical & Medical PILL | -41.35% | -43.86% |
Price Action: After Thursday’s fall, following Wednesday’s rebound, the Nasdaq 100 index was 17.46% lower than its previous high of 22,222.61 points. The S&P 500 index was down 14.31% from its record of 6,147.43 points, and the Dow Jones declined 12.16% from its 52-week high of 45,073.63 points.
The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, ended lower on Thursday. The SPY was down 4.38% to $524.58, while the QQQ declined 4.25% to $446.18, according to Benzinga Pro data.
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