TikTok and New Tariffs: Trump Moves the Nasdaq

Markets were awaiting details of the deal that would allow TikTok to continue operating in the US on Thursday, but they also received a surprise announcement of tariffs on pharmaceuticals, heavy-duty trucks, and furniture.

The Latest Developments

• Trump imposed the anticipated pharmaceutical tariffs, but surprised the market by adding tariffs on heavy-duty trucks and kitchen cabinets. The move left markets uncertain about future trade moves.
• The reaction among equity markets to the 100% tariffs on pharmaceuticals was mitigated by provisions that allowed firms that had invested in the US to sidestep the levies.
• Trump also signed the $14 billion deal for US investors to acquire TikTok, which would prevent the social media app from being banned; however, there were little to no new details provided.

Mixed Market Reactions to New Tariffs

Although the White House had been studying the application of new tariffs for months, the timing of US President Donald Trump's . The measures were announced on Trump's social media platform, Truth Social, including 25% taxes on new heavy truck imports, a 50% levy on kitchen and bathroom cabinets, and a 100% tariff on branded or patented drug imports. All of these changes would take effect on October 1, in the middle of next week. He stated that the intent of the tariffs was to support domestic manufacturing, and the measures allowed certain exceptions for companies that built factories in the US. The Administration had long previewed the pharmaceutical tariffs, but the levies on trucks and, particularly, furniture came as a surprise.

The market reaction was mixed, with , while European manufacturers of large trucks and their components declined. Firms clarified their situation in the wake of the tariff announcement, suggesting that many will avoid the imposition of tariffs because their brand products are already made in the US, or they are in the process of building US facilities. Those include firms like CSL, which said that it saw no impact from the tariffs, and AstraZeneca, which announced a $50 billion pharmaceutical investment in the US in July. The situation with the heavy trucks was a bit different, as US producers such as Paccar cheered the news, while large engine manufacturer Traton (which supplies Scania and VW) saw its shares under pressure. Daimler Truck, the owner of Freightliner, did not respond to press requests about how the measures would affect its operations.

TikTok and China in Focus

The new tariffs overshadowed Trump's signing of an executive order to finalise the deal, in compliance with US law, which required the firm to become American-owned or face a ban. Investors seeking more details on the terms, such as which US companies will own how much of the new US TikTok, were disappointed by the lack of new information, although the company's value was set at $14 billion. The deal was viewed in the context of the US and China still at odds on trade, and was the main takeaway from a much-anticipated conversation between Trump and China's President Xi Jinping earlier in the month. So far, it's known that Oracle will oversee the app's algorithm, and the US government will have a stake. However, the deal still needs regulatory approval from both Washington and Beijing. Analysts viewed the app deal as a sign of slow progress in trade negotiations between the world's two largest economies, and look forward to Trump and Xi meeting next month at the APEC Summit in South Korea. Meanwhile, the Nasdaq reacted more to the imposition of tariffs than to the TikTok deal, with increased uncertainty seen weighing on risk appetite.

Nasdaq at Critical Junction Near Triangle Peak

The tech-heavy Nasdaq declined for the third consecutive session to reach a low of 24200 after hitting a record high of 24790 earlier in the week. Notably, the drop came about following a retest of the upper trendline of a long-term open triangle pattern while the RSI entered the overbought territory. If the RSI continues to decline to reset near 50 or the 30 area, Nasdaq could break under the double bottom formation at 24k and even slide towards 23k, where prices formed strong support in early September. Losing this level could be interpreted as a deeper correction by markets, positioning the index near correction territory, 10% below its peak, at approximately 22250. On the other hand, if any of these short-term supports hold firm, the Nasdaq could overtake 25k, with a valid breakout outside the triangle trendline exposing higher levels.

Source: SpreadEx | US Tech, Daily chart