European stock indexes fell sharply amid a negative reaction in global financial markets caused by the introduction of another round of major trade tariffs by US President Donald Trump.
London's FTSE 100 index fell 0.6% in early trading on Friday, while other European markets suffered sharper losses, with France's Cac 40 index falling 1.8% and Germany's Dax down 1.7%.
This came after a sharp decline in Asian indices overnight, with China's Hang Seng index falling 1.1% and Japan's Nikkei 225 down 0.7%.
Mr Trump signed an order imposing new tariffs on a number of US trading partners, which will take effect on August 7.
Major exporters to the US such as Taiwan will face new high tariffs.
While the new tariffs are less severe than those announced on so-called Liberation Day on April 2, many U.S. trading partners will still face sharp increases.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Countries that have been playing tariff poker with Donald Trump were bluffed when, shortly before the August 1 deadline, the US announced new import tariff rates for 92 countries, ranging from 10 to 41 per cent.
“The only significant delay was Mexico, which was given 90 days to reach an agreement.
“A separate deadline has already been set for China: August 12.”
World Trump signed an order introducing new duties on a number of… Read more
Joshua Mahoney, chief market strategist at trading group Rostro, said markets would be concerned about the impact of tariffs and whether they would lead to a sharp rise in global inflation.
He noted: “Part of the problem for markets is the question of who will bear the burden of these tariffs, and in the best case scenario it will be foreign companies that suffer the most because of the squeeze on margins.
“Yet that’s not quite the case: American consumers are starting to feel the squeeze from high prices, while earnings at companies like General Motors, Ford and Apple highlight the fact that they are expected to suffer billions in losses from Trump’s tariffs.”
Sourse: breakingnews.ie
