Shares of Asian drugmakers drop after Trump threatens tariffs

Shares of Asian drugmakers mostly fell on Friday after US President Donald Trump threatened 100 per cent tariffs on imports of branded pharmaceuticals from Oct 1, unless their producers had already broken ground on US manufacturing plants.

In South Korea, Samsung Biologics fell 1.6 per cent, while SK Biopharmaceuticals slid 2.6 per cent.

But Celltrion, which said on Tuesday it had paid US$330 million to acquire ImClone Systems LLC from Eli Lilly in the United States, rose 1.3 per cent after recouping losses.

In Japan, Sumitomo Pharma tumbled 4.3 per cent, Otsuka Holdings dropped 3.5 per cent, and Daiichi Sankyo lost 1.6 per cent, although Takeda added 0.2 per cent and Shionogi gained 1.3 per cent.

Hong Kong’s Hang Seng Biotech Index was down about 2.58 per cent.

Markets had already been braced for further tariffs and investigations by the Commerce Department, said Carol Kong, economist and currency strategist at Commonwealth Bank of Australia in Sydney.

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“The sectoral tariffs are here to stay because those have proven to be more legally sound than the emergency tariffs that the lower courts judged to be illegal,” she said.

“Sectoral tariffs are going to push the US government’s effective tariff rate a little bit high - it was about 10 per cent in August, we expect the global effective tariff rate to edge further to about 18 per cent in the coming months.”

However, the broader impact on economies like Japan and Australia may be fairly limited, she added. AFP