U.S. Stocks Close Lower as Trump Announces Hefty Pharma Tariffs
(MENAFN) US stock markets closed lower Tuesday following President Donald Trump’s announcement of hefty tariffs on pharmaceuticals—potentially reaching 250%—and impending tariffs on semiconductors and chips expected as soon as next week.
The Dow Jones Industrial Average slipped 0.14%, or 61.9 points, ending the session at 44,111.74. The tech-heavy Nasdaq dropped 0.65%, losing 137.03 points to close at 20,916.55, while the S&P 500 declined 0.49%, down 30.75 points to 6,299.19.
President Trump outlined plans for tariffs on pharmaceutical imports, starting with relatively modest duties that could escalate sharply over time to encourage domestic manufacturing.
"On pharmaceuticals, we'll be putting a, initially small tariff ... but in one year, one and a half years, maximum, it's going to go to 150% and then it's going to go to 250% because we want pharmaceuticals made in our country," he told media.
In addition to pharmaceutical tariffs, Trump confirmed upcoming tariffs targeting the semiconductor and chip sectors, emphasizing the goal of boosting U.S. production.
“We’re going to be announcing on semiconductors and chips, which is a separate category, because we want them made in the United States,” the president said.
Following this announcement, semiconductor-related stocks reacted negatively: Nvidia dropped 0.97%, AMD declined 1.4%, and Qualcomm fell 0.54%.
Trump also commented on ongoing trade negotiations with China, noting that both nations are rapidly closing in on a deal that would significantly reduce import tariffs between the two largest economies.
On a separate front, Trump addressed potential candidates for Federal Reserve Chair, mentioning Treasury Secretary Scott Bessent is not interested in the position.
Bessent "wants to stay where he is," Trump said, though he did not disclose who else is being considered to succeed Jerome Powell.
On economic data, the U.S. trade deficit narrowed sharply in June, decreasing by 16% month-over-month to $60.2 billion. This figure beat expectations, which forecast a deficit near $62 billion, marking the smallest deficit since September 2023.
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