Trump announces 100% tariffs on pharmaceuticals unless drug makers are building U.S. factories

By Mike Murphy and Barbara Kollmeyer

Wayfair, RH, Williams Sonoma stocks fall as steep tariffs also announced on cabinets and upholstered furniture

President Donald Trump announced new tariffs Thursday.

A raft of new tariffs announced by President Donald Trump included a 100% levy on imported pharmaceuticals unless their manufacturers are actively building factories in the U.S.

In a series of social-media posts late Thursday, Trump also announced new 50% tariffs on kitchen cabinets and bathroom vanities, 30% tariffs on upholstered furniture and 25% levies on heavy trucks, all effective Oct. 1. While overseas pharmaceutical stocks had a mixed reaction, shares of home furnishings sellers were showing pressure in premarket on Friday.

Trump said those tariffs are to protect American businesses from overseas manufacturers "flooding" the market. "It is a vary unfair practice, but we must protect, for National Security and other reasons, our Manufacturing process," Trump said in a post.

The tariffs on branded or patented pharmaceuticals will also take effect Oct. 1, Trump said. He specified that companies that have already broken ground or started construction on new factories in the U.S. will be exempt.

No other details were immediately released.

Trump has pushed tariffs as a way to boost manufacturing in the U.S. But in August, the U.S. had 42,000 fewer manufacturing jobs than it had in April, according to data from the Bureau of Labor Statistics.

Also read: Trump floats using tariff money to help farmers hurt by trade wars

The latest moves are likely to rekindle inflation worries, especially concerning the potential for soaring healthcare expenses as some drug prices could double.

In recent months, Trump has floated tariffs of as much as 250% on foreign-made pharmaceuticals, and has also vowed to cut prescription drug prices by 1,000%, which is mathematically impossible.

On Wednesday, the Trump administration announced it has started new national-security investigations - seen as the first step in eventually imposing tariffs - on robotics, industrial machinery and medical devices.

Trump's tariffs have not caused U.S. inflation to rise as much as some had predicted, and most top Federal Reserve officials now believe any inflation caused by tariffs will be short-lived.

But Fed Chair Jerome Powell has warned that the specter of inflation is still lingering. "There are no risk-free paths now. It's not incredibly obvious what to do. So we have to keep our eye on inflation," Powell said last week after the Fed cut interest rates.

On Tuesday, Powell said the inflationary effects of tariffs will likely be spread out over several quarters as they work their way through supply chains.

He added that, so far, the impact of tariffs on consumers "has been later and less than we expected."

"How much of that will continue, I don't know," Powell said. He added that the responsible thing to do is to watch and wait, because "it is our job to make sure we don't make a mistake on inflation."

Earlier Thursday, the U.S. posted surprisingly strong growth in gross domestic product, which rose to an annual pace of 3.8%, its strongest increase in nearly two years, as consumers stocked up before some tariffs took effect in August.

Ahead of Friday's market open, shares of Wayfair (W) and RH shares (RH) fell around 4% and Williams-Sonoma (WSM) dropped 3% as those fresh tariff announcements took aim at companies selling home decor and furnishings.

Elsewhere the European pharmaceutical sector largely shook off initial losses on Friday, given some of the biggest pharmaceutical companies have already pledged U.S. investments.

GSK (GSK) (UK:GSK), earlier this month announced plans to invest $30 billion in research and development and manufacturing in the U.S. over the next five years. Novartis (NVS) (CH:NOVN) announced a similar plan worth $23 billion earlier this year. AstraZeneca (AZN) (UK:AZN) announced a $50 billion plan. Shares of all three were largely flat.

"It remains unclear whether the exemption applies only to specific products or to the whole company. Additionally, it is uncertain whether the tariff will be implemented under Section 232," said Wolf von Rotberg, equity strategist at J. Safra Sarasin Sustainable Asset Management, in emailed comments. Section 232 of the Trade Expansion Act of 1962 is what Trump has used to impose tariffs on steel, aluminum and automobile imports.

"However, it is likely that the tariffs would persist even if the Supreme Court ruled country-specific tariffs illegal," said von Rotberg.

Shares of Denmark's Novo Nordisk (DK:NOVO.B) (NVO) stood out with a 1.4% drop. The pharma group, which makes the main ingredient for weight-loss drug Ozempic, has a major production plant in North Carolina.

Another stock under pressure was heavy truck maker Daimler (XE:DTG), with shares of the German company down nearly 3% after the levies announced on that sector.

Shares of several Asian drugmakers fell sharply. Japan's Chugai Pharmaceutical (JP:4519) saw its stock drop nearly 5%, JD Health (HK:6618) in Hong Kong dropped 4% and shares of SK Bio Pharmaceuticals (KR:326030) from South Korea fell 3.5%.

Opinion: Cheap pharmaceuticals from China and India put Americans at risk. Here's the cure.

-Mike Murphy -Barbara Kollmeyer

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09-26-25 0600ET