- Global market slide spreads to Europe after Trump announces metal tariff plans.
- Stocks fall further mid-morning after the president tweets that “trade wars are good.”
- On Thursday, Trump promised new tariffs of 25% for steel and 10% for aluminium.
- The news caused US stocks to tumble, and the sell-off has continued in Europe on Friday.
A global stock market slide triggered by President Trump’s tariff announcements on Thursday has spread into Europe on Friday morning, with all the continent’s major bourses dropping substantially after the president said that “trade wars are good.
“When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $US100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!,” he tweeted.
On Thursday, Trump promised new tariffs – taxes on imports – of 25% for steel and 10% for aluminium. The president did not specify whether any countries would be exempt, but the restrictions are expected to be wide-ranging.
That news sparked concerns about the beginning of a global trade war, whereby countries around the world impose tariffs on each other, ostensibly to protect their own interests. Such a battle would lead to higher prices and could stifle international trade.
Markets reacted badly to the news, with major US indices losing between 1.2% and 1.7% by the close on Thursday. The Dow Jones industrial average plunged 420 points, with its worst level of the day a fall of almost 600 points.
Those losses continued into Asia overnight, and by Friday morning, the European markets were also sliding. The falls intensified mid-morning after President Trump tweeted that “trade wars are good, and easy to win.”
Here’s the scoreboard as of 11.05 a.m. GMT (6.05 a.m. ET)
- Britain’s FTSE 100 – down 1.03% to 7,101 points
- Germany’s DAX – down 2.15% to 11,928
- France’s CAC 40 – down 1.84% to 5,165
- Italy’s FTSE MIB -down 2.37% to 21,939
News of Trump’s planned trade measures has not so far been well received in Europe, with Jean-Claude Juncker, the president of the European Commission, saying in a statement that the European Union would “react firmly and commensurately to defend our interests.”
“We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification,” Juncker said. “Protectionism cannot be the answer to our common problem in the steel sector.”