^{Photo: Bloomberg.com}

European stock markets opened in positive territory on Friday, as investors digested the latest protectionist trade measures announced by former U.S. President Donald Trump. The pan-European Stoxx 600 index gained 0.4% in early trading, with most sectors showing modest strength. Healthcare stocks, though directly in the spotlight, managed a slight uptick, with the Stoxx Europe 600 Healthcare index up 0.2%.

Trump’s New Tariff Policy

Trump announced late Thursday that all pharmaceutical imports into the U.S. will face a 100% tariff starting October 1. Companies that have committed to U.S.-based manufacturing will eventually be exempt, but only once construction has begun on their domestic production facilities.

This latest move follows months of escalating rhetoric. Trump had previously floated the possibility of tariffs as high as 200% on imported medicines, arguing that the U.S. must reduce dependence on foreign drug manufacturers. The new policy is expected to shake up global supply chains, especially in Europe, which is home to several of the world’s largest pharmaceutical exporters.

Mixed Reaction Across Healthcare Stocks

Despite the broader healthcare index holding slightly higher, individual companies showed weakness. Swiss dermatology specialist Galderma dropped 1.6%, Zealand Pharma fell 2%, and Danish giant Novo Nordisk slipped 1.4% in morning trading.

Analysts, however, urged caution before reading too much into the immediate selloff. In a research note following the announcement, J.P. Morgan strategists said the impact of the tariffs may be “largely avoidable” as many companies already have plans to expand U.S.-based manufacturing. They added that while uncertainties remain, they expect the overall financial hit to large-cap pharmaceutical firms to be “very manageable.”

Wider Trade Tensions in Focus

Trump’s tariff announcement wasn’t limited to pharmaceuticals. He also confirmed a 25% tariff on heavy trucks imported into the U.S., effective next month. The move is seen as another escalation in his broader “America First” trade strategy, aimed at incentivizing companies to build in the U.S. rather than rely on imports.

Meanwhile, Europe is preparing its own trade defense measures. According to German business daily Handelsblatt, the European Union is considering tariffs of up to 50% on Chinese steel imports in the coming weeks. This signals a widening trade standoff, with healthcare, autos, and industrials now all in the firing line of new levies.

Impact Beyond Europe

The tariff news rippled across Asian markets overnight, where pharmaceutical stocks closed lower as investors assessed the likely drag on export-driven firms. Markets in Japan, South Korea, and China saw sector declines, underscoring the global reach of U.S. trade policy shifts.

In Europe, investors also remain cautious after the U.S. recently launched a national security investigation into medical device imports, which analysts warn could pave the way for yet more tariffs.

Broader Economic Context

Beyond trade tensions, investors are keeping an eye on Friday’s slate of European economic data. Spain is releasing its latest inflation report, the U.K. will publish figures on mortgage lending, and the eurozone is set to unveil a new measure of consumer and business sentiment. These updates will provide additional clues on the region’s economic resilience at a time when global trade policy is creating fresh uncertainty.

While the immediate reaction in European markets has been muted, the longer-term implications for drugmakers and exporters could be significant. With tariffs set to take effect in just days, pharmaceutical giants across Europe are weighing their next moves in what could become a major restructuring of cross-border supply chains.