Late last week, President Trump declared more tariffs on many more products and sectors. This included the drug sector. Fortunately, investors dismissed the threat, and drug stocks rose.
On September 26, the President said the government would impose 100% tariffs on pharmaceutical products. Those who build manufacturing plants in the U.S. will not face this duty.
Last Friday, shares of Merck (MRK), Johnson & Johnson (JNJ), Bristol Myers (BMY), and Eli Lilly (LLY) rose. Markets recall that the Trump administration announced 250% tariffs on pharmaceuticals. That dropped to 200% a few weeks ago.
Sources reported that the administration planned to add tariffs on foreign electronic devices. This is based on the chip count in each device. If that happened, Chinese electronics firms would be hit the hardest. In addition, U.S. consumers would face higher costs. Companies to watch in the electronic manufacturing sector include Celestica (CLS) and Jabil (JBL).
Tariff Deal Costs Too High
On the weekend, South Korea’s presidential advisor said that it cannot pay for the upfront investment cost. The President suggested paying $350 billion upfront. Before that, the two countries agreed on U.S. tariffs of 15%, down from 25%. In July, South Korea said it would use loans, loan guarantees, and equity for that investment.
Investors should be wary of holding stocks like Hyundai (HYMTF) for the time being.
