Trump’s Tariff Gambit Hits Drugs, Trucks, Furniture as Markets Pick Winners

President Trump’s new tariff package covers pharmaceuticals, heavy trucks, and furniture, yet markets have reacted with surprising calm. Instead of broad turbulence, investors are distinguishing between sectors likely to suffer and those positioned to benefit, showing how trade policy is now being interpreted less as a universal shock and more as a tool that redistributes competitive advantage.

Trump unveiled a 100% tariff on imported branded pharmaceuticals, initially raising concerns of higher costs and disrupted supply. Markets quickly realized that the carveouts matter. Generic drugs, which account for about 90% of U.S. consumption, are excluded, and the measure spares companies already building plants in America. That nuance transformed what looked like a sweeping penalty into a targeted push for reshoring. Shares of Eli Lilly, Merck, and Pfizer rose as investors concluded that Washington’s policy shields domestic champions while penalizing foreign rivals reluctant to commit capital on U.S. soil.

The impact on autos painted a different picture. A 25% levy on imported heavy trucks sent Daimler Truck down roughly 3%, underlining Europe’s vulnerability to American trade measures. Yet U.S. truck maker Paccar surged 6%, its investors betting that higher barriers for competitors will translate into market share gains at home. The pattern illustrates how tariffs now function as selective instruments that weaken one group of firms while bolstering another, a hallmark of Trump’s trade strategy.

Furniture markets, despite steep duties of 50% on kitchen cabinets and 30% on upholstered pieces, reacted with resilience. Wayfair climbed 2% and RH inched higher, signaling that investors expect consumer demand to absorb some of the cost pressure or that supply chains will adapt. The muted market response reflects the view that in fragmented, lower-margin industries tariffs rarely generate lasting earnings damage.

Beyond these immediate measures, the administration is exploring a policy that would require U.S. semiconductor production to match the volume of imports. The idea, rooted in national security concerns, highlights Washington’s determination to reduce reliance on Asian supply chains. Intel gained on the expectation of fresh investment incentives and subsidies, reinforcing the view that reshoring efforts will support domestic producers in strategically sensitive sectors.

For financial markets, the message is that tariffs today are less about unleashing broad inflationary shocks and more about redistributing advantage across sectors and geographies. Equities have quickly identified likely winners in U.S. pharmaceuticals, industrials, and semiconductors, while European exporters remain under pressure. Bonds showed little sign of panic, suggesting investors see the measures as targeted rather than systemic, though a prolonged escalation could eventually revive stagflation fears. Commodities may benefit from higher U.S. onshoring demand, particularly in energy and metals, while currency markets are likely to treat the strategy as supportive for the dollar if it attracts capital flows into domestic manufacturing.

For investors, the takeaway is that tariff policy has evolved into a surgical tool rather than a blunt weapon. U.S. firms positioned as domestic champions appear best placed to capture the upside, while European automakers and furniture exporters may remain vulnerable, especially if the European Union responds with countermeasures. The larger risk is not today’s sectoral shifts but the gradual fragmentation of global trade that could raise costs and complicate supply chains worldwide.

In the short term, Wall Street is rewarding the winners and shrugging off broader risks. Over the longer run, investors will need to navigate a market shaped less by global efficiency and more by political strategy, where protectionism reshapes supply chains and reallocates profit pools. The tariff cycle may not derail markets for now, but it is transforming them into an environment where selectivity matters more than ever.