Global Stock Markets Experience Significant Decline Amid Trade War Fears
International stock indices drop sharply as President Trump's new tariff measures prompt investor anxiety.
Global stock markets are facing significant declines as investors react to recent tariff announcements made by President Trump during a press conference at the White House.
The new tariff regime, termed 'Liberation Day,' introduces a 10% levy on all UK goods exports to the United States, with steel, cars, and car parts facing a 25% tariff.
The FTSE-100 index in London opened 118.1 points lower, marking a 1.37% drop at 8,490.38. This tariff will impact approximately £60 billion of British exports to the US, affecting various sectors, including Scotch whisky and pharmaceuticals.
Meanwhile, European markets, including indices in Germany and France, saw even steeper declines in excess of 2%.
In other markets, the Japanese Nikkei 225 index initially fell by over 4% in response to a 24% tariff on its exports, eventually closing the day at 34,622.27, a decline of 1,103.60 points or just over 3%.
In South Korea, the Kospi index dropped 1.5% to 2,468.97 amidst a 25% tariff, while Hong Kong's Hang Seng index lost 1.4%.
Conversely, the British pound strengthened against the US dollar, reaching just above $1.31, its highest level since October of the previous year.
This rise is largely attributed to concerns about a potential recession in the United States.
UK Labour Party leader Keir Starmer acknowledged the economic impact of the US tariff policies, warning business leaders that repercussions would be felt both domestically and internationally.
Duncan Edwards, CEO of the transatlantic trading organization BritishAmerican Business, expressed disappointment at the tariff imposition, citing a mixed outlook as the new 10% tariff is less severe than what larger trading partners, like the EU, face.
Edwards noted the significant challenges that the 25% tariff would pose for UK car exporters.
Reports indicated that global investors reacted sharply to the implications of a tariff regime not seen since the 1930s, raising concerns about further retaliations.
Roman Ziruk, a market analyst, detailed that the average tariff rate under Trump's administration has escalated from approximately 2.5% to over 20%, marking the highest levels in over a century.
The tariffs imposed on Asian countries include punitive reciprocal tariffs exceeding 40%, compounding their adverse economic impacts.
Barret Kupelian, chief economist at PwC, commented on the pronounced effect of the tariffs on the UK economy, despite it being less impacted than other nations.
The economic uncertainty created by the tariffs is expected to cause significant disruptions in various sectors, particularly in the automotive industry.
Daniel Murray, of EFG, outlined the potential for increased likelihood of both US and global recessionary pressures as a result of the tariffs, alongside heightened inflation, complicating the decisions of central banks.
On an operational front, traders noted a consistent rise in gold prices, reflecting investor inquiries for safer assets amid instability.
The US dollar weakened as tariff concerns escalated, while the pound gained approximately 0.4% against it.
A detailed financial analysis also revealed mixed performances among individual companies, with housebuilders and leisure stocks facing noteworthy declines, while certain consumer goods firms saw minor gains amidst turbulent market conditions.
The EU has indicated its preparedness to retaliate against the tariffs, highlighting a sense of unity among member states in response to unilateral trade measures taken by the US. European Commission President Ursula von der Leyen emphasized that the bloc feels let down by its traditional ally and is equipped to respond decisively to the US's recent actions.
The new tariff regime, termed 'Liberation Day,' introduces a 10% levy on all UK goods exports to the United States, with steel, cars, and car parts facing a 25% tariff.
The FTSE-100 index in London opened 118.1 points lower, marking a 1.37% drop at 8,490.38. This tariff will impact approximately £60 billion of British exports to the US, affecting various sectors, including Scotch whisky and pharmaceuticals.
Meanwhile, European markets, including indices in Germany and France, saw even steeper declines in excess of 2%.
In other markets, the Japanese Nikkei 225 index initially fell by over 4% in response to a 24% tariff on its exports, eventually closing the day at 34,622.27, a decline of 1,103.60 points or just over 3%.
In South Korea, the Kospi index dropped 1.5% to 2,468.97 amidst a 25% tariff, while Hong Kong's Hang Seng index lost 1.4%.
Conversely, the British pound strengthened against the US dollar, reaching just above $1.31, its highest level since October of the previous year.
This rise is largely attributed to concerns about a potential recession in the United States.
UK Labour Party leader Keir Starmer acknowledged the economic impact of the US tariff policies, warning business leaders that repercussions would be felt both domestically and internationally.
Duncan Edwards, CEO of the transatlantic trading organization BritishAmerican Business, expressed disappointment at the tariff imposition, citing a mixed outlook as the new 10% tariff is less severe than what larger trading partners, like the EU, face.
Edwards noted the significant challenges that the 25% tariff would pose for UK car exporters.
Reports indicated that global investors reacted sharply to the implications of a tariff regime not seen since the 1930s, raising concerns about further retaliations.
Roman Ziruk, a market analyst, detailed that the average tariff rate under Trump's administration has escalated from approximately 2.5% to over 20%, marking the highest levels in over a century.
The tariffs imposed on Asian countries include punitive reciprocal tariffs exceeding 40%, compounding their adverse economic impacts.
Barret Kupelian, chief economist at PwC, commented on the pronounced effect of the tariffs on the UK economy, despite it being less impacted than other nations.
The economic uncertainty created by the tariffs is expected to cause significant disruptions in various sectors, particularly in the automotive industry.
Daniel Murray, of EFG, outlined the potential for increased likelihood of both US and global recessionary pressures as a result of the tariffs, alongside heightened inflation, complicating the decisions of central banks.
On an operational front, traders noted a consistent rise in gold prices, reflecting investor inquiries for safer assets amid instability.
The US dollar weakened as tariff concerns escalated, while the pound gained approximately 0.4% against it.
A detailed financial analysis also revealed mixed performances among individual companies, with housebuilders and leisure stocks facing noteworthy declines, while certain consumer goods firms saw minor gains amidst turbulent market conditions.
The EU has indicated its preparedness to retaliate against the tariffs, highlighting a sense of unity among member states in response to unilateral trade measures taken by the US. European Commission President Ursula von der Leyen emphasized that the bloc feels let down by its traditional ally and is equipped to respond decisively to the US's recent actions.
