Global markets are reacting cautiously to remarks made by President Donald Trump regarding potential tariffs on pharmaceuticals and metals. This morning, the FTSE 100 opened 22 points higher, despite looming threats that could significantly impact major stocks within the index. Trump indicated that an announcement on pharmaceutical tariffs would come “very soon,” suggesting a possible rate of 200 percent within the next year.
Pharmaceutical stocks on the FTSE 100 have shown relative stability at market open. Notably, GlaxoSmithKline (GSK) experienced a minor dip of 0.11 percent, while the broader sector was down 0.37 percent. In 2024, the United States imported $212 billion worth of pharmaceuticals, and although these products have been exempt from tariffs thus far, Trump’s comments hint at a potential shift that could affect this exemption.
The President has claimed that tariffs have had “ZERO IMPACT on inflation” and that “Import Prices are actually DROPPING.” This assertion comes as the market grapples with the implications of new tariffs on copper, which have sent prices soaring. Following Trump’s announcement of a new 50 percent levy on copper, prices surged to nearly $5.50 per pound, marking a historic daily increase of 13.25 percent, the largest seen since the 1980s, according to Deutsche Bank.
The announcement regarding copper tariffs has adversely affected London-listed mining companies. Stocks for major players such as Antofagasta, Glencore, and Anglo American all dropped by over two percent as trading commenced, contributing to a more muted overall performance of the FTSE 100, which inched up only 0.1 percent in early trading.
In response to these developments, Howard Lutnick, the United States Commerce Secretary, stated that a departmental investigation into copper tariffs concluded that the new tax is likely to take effect by the end of July or early August. Derren Nathan, head of equity research at Hargreaves Lansdown, noted that the UK currently adheres to a previous rate of 25 percent on copper, which could potentially drop to zero under a forthcoming trans-Atlantic trade deal. Despite this, the surge in copper prices indicates strong demand as buyers rush to build stockpiles.
As the situation unfolds, investors remain on alert, closely monitoring the potential ramifications of Trump’s tariff announcements on both domestic and international markets. The forthcoming weeks may prove critical as details of these tariffs are finalized and implemented.
