"250% Tariffs on Both Drugs and Chips"—A Night When Trump's "Bombshell" Shook the Global Market: Attention Turns to Next Week's Announcement

2. Background: Are Tariffs a Universal Tool?

After entering his second term, Trump has repeatedly launched "additional bombings" of country-specific and item-specific tariffs following the comprehensive 10% tariff in April. Pharmaceuticals and semiconductors are symbolic sectors where domestic dissatisfaction concentrates, namely rising healthcare costs and AI semiconductor shortages, making them prime targets to boost the White House's approval ratings.

3. Impact on the Pharmaceutical Sector

The day after the announcement, stock prices, especially European pharmaceutical stocks, fell simultaneously. The STOXX Healthcare Index dropped by 2%, and Bayer temporarily fell by 6.5%.The Guardian
Merck, Eli Lilly, and others commented that "immediate repatriation of the multinational supply chain is unrealistic." The industry group BIO criticized, saying, "It will inversely increase medical costs and burden patients."

4. Semiconductors: A Cold Shower on the AI Bubble

The semiconductor tariffs will directly hit the cost structure of AI cloud investments. Companies like Microsoft, OpenAI, Meta, and Amazon, which are investing heavily in securing advanced GPUs, will need to brace for "additional costs in the billions of dollars."

5. The Ripple Effect of TSMC and the "300 Billion Dollar" Statement

In the interview, Trump mentioned that "TSMC will invest $300 billion in Arizona," but the actual investment plan is said to be around $165 billion. The discrepancy in figures caused market confusion, and the Taiwanese side refrained from commenting.

6. Legal Basis and Countermeasures

The item-specific tariffs this time are based on the national security clause of Section 232 of the Trade Expansion Act. The 232 investigation will be completed in about 9 months, and it could be implemented as early as August 14. In response, Switzerland is seeking a concession proposal in Washington, led by the president himself, regarding the 39% tariff on watches and chocolates.Reuters

7. Reactions from Emerging and Allied Countries

India maintains a hardline stance to "protect farmers," while the EU suggests a "possible violation of WTO rules." A Brazilian Ministry of Economy official stated, "The direct impact on our country, which focuses on primary products, is limited," but there is a move to freeze investment plans for semiconductor manufacturing contractors.

8. Frenzy and Division on Social Media

On *X (formerly Twitter)*, "#PharmaTariffs" and "#ChipWar" instantly became global trends.

• Supporters (Conservative Influencers): "Put an end to drug price gouging" "It's the dawn of American manufacturing."

• Concerned Parties (Healthcare Workers and Patient Groups): "Elderly drug costs will skyrocket" "Generic supply is also at risk."
  On Reddit's PrepperIntel board, there are a series of posts expressing a sense of crisis, such as "250% will lead to medical collapse."Reddit

9. Market and Expert Outlook

Economists point out, "Even if short-term tariff revenue increases, there is a risk of reigniting inflation due to currency appreciation and cost pass-through." Given that about 70% of the cost of pharmaceuticals depends on overseas sources, companies are likely to pass on the price. In semiconductors, a shift away from China is expected, but if alternative procurement sources (Korea, Taiwan) are also subject to the same tariffs, they cannot avoid increased costs.

10. Future Scenarios

1. Negotiation Card Theory: Just before implementation, allied countries strengthen investment promises, and tax rates are lowered.

2. Full Implementation Theory: While accepting rising drug prices, promote domestic manufacturing as an "achievement" for the 2026 midterm elections.

3. Judicial Injunction Theory: The pharmaceutical industry files a lawsuit, and a federal district court issues a temporary injunction.

11. Conclusion

Trump's "shock therapy" may cause short-term market turmoil, but in the medium to long term, it will force countries to rebuild supply chains and review industrial policies. The tariff dominoes that began in the two major sectors of pharmaceuticals and semiconductors, which hold the lifeline, may become the prologue to rewriting the rules of the global economy—next week's official announcement will be the touchstone.

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