Global Markets Fall in Response to Trump’s Tariffs

Global stock markets fell on Thursday as investors reacted to US President Donald Trump’s sweeping announcements on tariffs

The UK’s FTSE 100 share index fell 1.5%, European markets were also lower, echoing falls seen earlier in Asia where the Nikkei shed 3% and the Hang Seng 1.5%; conversely the price of gold reached a record as investors sought sanctuary.

Shares in Europe followed down, with Germany’s Dax index down 2.2% and France’s Cac 40 dropping 2.5%; gold hit a record high of $3,167.57 an ounce at one point before falling back.

Traders are concerned about the global economic impact of Trump’s tariffs, which they fear could stoke inflation and stall growth; futures markets predict US shares will also open lower – the S&P 500 is indicated to fall by 3% and the Dow Jones by 2.4%.

The decision by the US government to impose a combination of a 10% baseline levy and higher duties on a number of other trading partners reverses decades of liberalisation that shaped the global trade order.

Jay Hatfield, chief executive at Infrastructure Capital Advisors said this is ‘enough to potentially send the US into a recession.

George Saravelos, head of FX at Deutsche Bank Research, said the new trade tariffs were a “highly mechanical” reaction to trade deficits, rather than the “sophisticated assessment” the White House had promised, risking ‘lowering the policy credibility of the [Trump] administration’.

Shares in sportswear firm Adidas fell more than 10%, while stocks in rival Puma tumbled more than 9% as key countries where their goods are made were hit with steep levies – 54% in China and 46% in Vietnam.

In the luxury sector, jewellery maker Pandora fell more than 12%, and LVMH (Louis Vuitton Moet Hennessy) fell 3% after tariffs were imposed on the European Union and Switzerland.

There are worries that the tariffs could affect US consumer spending which is a massive part of the global economy – between 10% and 15%, according to some economists’ estimates.