By Rae Wee
SINGAPORE (Reuters) -Shares in Asia slid on Friday, with pharmaceutical companies hit hard after U.S. President Donald Trump unveiled a fresh round of punishing tariffs and as traders pared bets of sharp U.S. rate cuts following stronger-than-expected economic data.
Trump announced the U.S. would impose 100% duties on imported branded drugs, 25% tariffs on heavy-duty trucks and 50% tariffs on kitchen cabinets.
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He also said he would start charging a 50% tariff on bathroom vanities and a 30% tariff on upholstered furniture, with all the new duties to take effect from October 1.
Shares of pharmaceutical companies across Asia tumbled in the aftermath, with Japan’s Topix pharmaceutical index last down 1.2%, while the Hong Kong-listed innovative drug index fell 2%.
Shares in South Korean drugmaker SK Biopharmaceuticals slid 3.6%, while Australian biotech firm CSL was down 1.5%.
An index tracking Chinese-listed furniture makers also dropped 0.7%.
European futures were last trading higher, with EUROSTOXX 50 futures up 0.35% while FTSE futures rose 0.2%.
“We were bracing ourselves for the sectoral tariffs on pharmaceuticals … I think the key thing is the details are still scant at this stage, but the tariffs seem to only apply to branded or patented drugs. So that’s quite important, particularly for India,” said Khoon Goh, head of Asia research at ANZ.
“But I think the initial knee-jerk reaction most likely would see probably a continuation of the equity market weakness that we’ve seen, as investors take a cautious approach.”
The announcements, made on Truth Social, did not include details about whether the new levies would apply on top of national tariffs or whether economies with trade deals such as the European Union and Japan would be exempted.
Washington’s trade deals with Japan, the EU, and Britain include provisions that cap tariffs for specific products such as autos, semiconductors and pharmaceuticals, which means the new higher national security tariffs likely will not raise them above agreed rates.
Nasdaq futures were down 0.1% while S&P 500 futures dipped 0.06%.
Broader indexes in Asia were meanwhile in the red, with the Nikkei last down 0.6% while Hong Kong’s Hang Seng Index was off 0.5%.
China’s CSI300 blue-chip index eased 0.3%, and MSCI’s broadest index of Asia-Pacific shares outside Japan was down 1%.
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Also adding to headwinds for stocks were reduced expectations of aggressive Federal Reserve rate cuts, after a slew of data on Thursday suggested the U.S. economy remains in rude health.