Stocks in Europe experienced a positive start on Friday, with the pan-European Stoxx 600 index climbing 0.4% shortly after the opening bell. This upswing comes as investors reacted to the latest trade policy announcements from the U.S. government. A broad array of sectors appeared to benefit from the positive sentiment, maintaining upward momentum early in the trading session.
The healthcare sector, reflected by the Stoxx Europe 600 Healthcare index, also experienced gains, moving up by 0.2%. However, some pharmaceutical companies faced downward pressure in the wake of President Donald Trump’s recent announcements regarding tariffs. Notably, Galderma saw a decline of 1.6%, Zealand Pharma dropped by 2%, and Novo Nordisk fell by 1.4%.
In a significant move, President Trump declared that from October 1, pharmaceutical imports into the United States would be subject to a 100% tariff. He mentioned that companies that establish manufacturing plants within the U.S. would be exempt from these tariffs—though only upon commencing construction on their facilities. This announcement came on the heels of prior threats of up to 200% tariffs on pharmaceuticals, raising concerns within the sector.
Despite the looming tariffs, JP Morgan strategists released a note indicating that the impact on the pharmaceutical industry may be more manageable than initially feared. They noted that the potential 100% tariffs could largely be avoided by shifting production to U.S.-based manufacturing. Their assessment suggests that while uncertainties remain regarding the implications of the new tariff policy, the overall effects on large-cap pharmaceutical stocks would be contained.
Additionally, the President announced via his Truth Social platform that a 25% tariff would be imposed on heavy trucks beginning next month, drawing attention to broader trade dynamics.
European Union trade policies are also being scrutinized, particularly after the German newspaper Handelsblatt reported that the EU may impose tariffs of up to 50% on Chinese steel in the upcoming weeks. This potential action adds another layer to the ongoing trade landscape.
The previous day’s trading saw European stocks close lower, driven by news of a national security probe launched by the Trump administration into medical device imports, which may lead to additional tariffs in that sector.
In Asian markets, pharmaceutical stocks reacted negatively overnight as investors braced for the anticipated U.S. tariffs. Economic data due for release later on Friday includes Spain’s latest inflation figures, mortgage lending statistics from the U.K., and a report on European economic sentiment, all of which will likely influence market conditions as the day unfolds.
