FTSE 100 pharma giants GSK and Astrazeneca appear to swerve Trump tariffs
FTSE 100 pharma giants GSK and Astrazeneca may have escaped the worst of US President Donald Trump’s tariffs, according to a City broker.
Pharmaceutical goods appear to be exempt from higher-rate tariffs introduced by President Trump in his Rose Garden ‘Liberation Day’ address on Wednesday, but there is still uncertainty about the impact on the sector.
This is according to a new research note from Shore Capital, which has spoken to FTSE 100-listed pharmaceutical giants GlaxoSmithKline (GSK) and Astrazeneca about their understanding of the tariffs.
Shore Capital said GSK had said that no changes to their outlooks are expected based on the available information, while Astrazeneca said they are assessing the implications of the announcement
Dr Sean Conroy, healthcare equity research analyst for Shore Capital, said: “Last night President Trump outlined broad reaching trade tariffs, but based on a clarifying Fact Sheet produced by The White House, it would appear that pharmaceutical goods imported into the US will be exempt from higher-rate Reciprocal Tariffs, at least for now.
“It is still somewhat unclear whether the broader reaching 10 per cent baseline tariffs could still be levied against imported drugs and vaccines, in our view.”
Shore Capital highlights a number of remaining unanswered questions for the sector, including the specific effects on drugs and vaccines production and the potentially inflationary impacts of trade levies on consumers.
UBS analysts said they believe the 10 per cent baseline tariff “does not appear to impose on pharmaceuticals”.
They noted that the language in the fact sheet suggested the 10 per cent tariff “acts as a ‘catch all’ for countries not outlined in his table of tariffs by country, with Pharma also being excluded from this tariff, in our view”.
The fact sheet issued by the White House last night says: “Some goods will not be subject to the Reciprocal Tariff. These include: (1) articles subject to 50 USC 1702(b); (2) steel/aluminum articles and autos/auto parts already subject to Section 232 tariffs; (3) copper, pharmaceuticals, semiconductors, and lumber articles; (4) all articles that may become subject to future Section 232 tariffs; (5) bullion; and (6) energy and other certain minerals that are not available in the United States.”
The note comes amid a plunge in the FTSE 100 on Thursday morning after announcing a flat 10 per cent tariff on all UK exports.
Trump’s health secretary Robert F Kennedy Jr poses ongoing worries for vaccine manufacturers, given his previous leadership of the anti-vaccine Children’s Health Defence group and his ousting of US vaccine official Peter Marks in March.
Dr Conroy added that the “globalised nature of supply chains across the industry” had posed “some perceived risk to near-term guidance” for the pharma giants.
In February, GSK upgraded its 2031 sales forecast to more than £40bn – up from £38bn – following better than expected fourth quarter 2024 earnings.