Global markets take a tumble as Trump pushes on with his trade war
Global stocks weakened on Friday morning after US President Donald Trump hit multiple countries with a blitz of tariffs.
Trump’s ambition to restructure the global trading order in his administration’s favour has sent jitters through markets on his set negotiation deadline day.
The FTSE 100 is down 0.7 per cent, with UK drug maker Astrazeneca among the biggest fallers with its share price down 3.8 per cent. Rival GSK’s share price also fell 1.3 per cent as Trump’s threats on pharmaceutical imports loomed large.
Trump does not always chicken out
Investors have been “caught off guard” by Trump’s refusal to push back the August 1st deadline to 1st September, but there wasn’t a “sharp market-sell off” as was seen after Trump’s Liberation day speech.
Russ Mould, investment director at AJ Bell said: “Investors have been caught off guard, having previously hoped Trump would kick the new tariff levels down the road pending further negotiations with foreign trade partners.”
“Instead, we’ve got new rates galore and that means investors need to spend time understanding what that means for companies in their portfolio.”
Europe takes a dive
The FTSE 100 is slightly outperforming European markets, despite European Commission chief Ursula von der Leyen reaching a deal with Trump on Sunday of a 15 per cent tariff on EU imports after months of negotiations.
The Euro Stoxx 50 index fell by over 1 per cent in early trading, while Germany’s Dax Index and France’s CAC fell 1.7 per cent and 1.8 per cent respectively.
In Asia, stock markets were broadly weaker with India’s Nifty 50 index dropping by 0.7 per cent and Taiwan’ s Taiex falling by 0.4 per cent after both countries’ were slapped with steep tariffs.
Todd McClone, portfolio manager at William Blair said, “Trump’s proposed 25 per cent tariff om Indian imports, alongside a vague but potentially significant penalty for India’s trade with Russia, marks a sharp escalation in trade tensions.”
At 25 per cent, India now faces one of the highest tariff rates among major US trade partners prior to the sixth-round negotiations between the two parties expected to take place in August.
The US stock market was also not immune to deadline day turmoil as the NASDAQ slid 0.7 per cent while the S&P 500 slipped 0.3 per cent upon close on Thursday.