Pharmaceutical Giants AstraZeneca and GSK Dodge Reciprocal Tariffs on Drug Imports
In a surprising turn of events, shares of UK pharmaceutical giants AstraZeneca PLC (LSE:AZN) and GSK PLC (LSE:GSK, NYSE:GSK) managed to avoid the wider sell-off on Thursday morning, amidst hopes that drug imports will be exempt from the new ‘reciprocal tariffs’.
According to a clarifying fact sheet produced by the White House alongside President Trump’s announcement, pharmaceutical products imported into the US will be exempt from higher-rate tariffs. This news came as a relief to many in the industry, as fears of a potential trade war between the US and the UK had been looming.
Impact on AstraZeneca and GSK
Analysts believe that this exemption could help mitigate some of the potential negative impacts of the tariffs on these companies. Sean Conroy, an analyst at Shore Capital, noted that “at least for now, this is good news for AstraZeneca and GSK.” He went on to explain that “these companies rely heavily on exports, and any disruption to their supply chains could have been costly.”
Impact on Consumers
The potential exemption of pharmaceutical products from the tariffs is also being seen as a positive development for consumers. According to a report by the American Enterprise Institute, the US imports about 80% of its prescription drugs, and many of these drugs are produced in countries like India and China. A tariff on these imports could have led to higher prices for consumers, as companies passed on the additional costs.
However, it’s important to note that this is not a definitive solution. The fact sheet produced by the White House only states that pharmaceutical products will be exempt “at least for now.” It remains to be seen how long this exemption will last, and whether it will be extended beyond the initial 90-day period.
Impact on the World
The potential exemption of pharmaceutical products from the tariffs is also being closely watched by other countries. India, for example, is a major exporter of generic drugs to the US, and any disruption to this trade relationship could have far-reaching consequences. According to a report by the Economist Intelligence Unit, “India could be one of the biggest losers from a US-China trade war, given its large trade surplus with both countries.”
Meanwhile, other countries are also looking to take advantage of the situation. For example, Canada has already expressed its interest in increasing its exports of pharmaceutical products to the US. In a statement, Canadian Prime Minister Justin Trudeau said “Canada is a trusted supplier of pharmaceuticals to the United States, and we stand ready to deepen our partnership on this front.”
Conclusion
In conclusion, the potential exemption of pharmaceutical products from the tariffs is a welcome development for both consumers and pharmaceutical companies. However, it’s important to remember that this is not a definitive solution, and the situation remains fluid. As the trade relationship between the US and other countries continues to evolve, it will be important for companies to stay informed and adapt to any changes as needed.
- AstraZeneca and GSK shares avoided wider sell-off on hopes of drug import exemption from tariffs
- Pharmaceutical products imported into US to be exempt from higher-rate tariffs “at least for now”
- Analysts see this as good news for AstraZeneca and GSK
- Exemption seen as positive development for consumers
- Long-term impact of exemption remains uncertain
- India and Canada positioning themselves to increase pharmaceutical exports to US
