- European stocks dived on Friday as fears surrounding a global trade war intensify.
- Most major indices on the continent ended the week more than 1% lower.
- The falls followed a bloodbath session in Asia, where some indices lost as much as 4% during the day.
- Drops have been triggered by President Donald Trump’s announcement that the US will impose new tariffs on imports from China.
Stocks plunged at the open, but losses remained similar throughout the day. Here’s the scoreboard at the close:
- Britain’s FTSE 100 – down 0.44% at 6,922 points
- Germany’s DAX – down 1.77% at 11,886
- France’s CAC 40 – down 1.39% at 5,095
- Italy’s FTSE MIB – down 0.44% at 22,307
- Spain’s IBEX 35 – down 1.01% at 9,392
Trump’s tariffs, which act as a tax on imports, will apply to goods worth about $US50 billion annually and hit industries from aerospace to pharmaceuticals. Additionally, the crackdown will limit certain types of Chinese investment into the US.
The tariffs are the latest step in Trump’s escalating trade war and have spooked investors, who see them as a potential threat to global economic growth.
On Thursday, the fears sparked a sell-off in Europe and North America before spreading into Asia overnight. Japan’s Nikkei closed down over 4% – it’s worst one-day fall since the market meltdown on February 6.
The sell-off continued into a second day on Friday as European markets opened lower. All the continent’s major stock indices are down around 1% or more at close to 8.30 a.m. GMT (4.30 a.m. ET).
Germany is the worst hit “as there are still no clear answers as to whether Germany will be exempt from the steel and aluminium tariffs,” according to Jasper Lawler, an analyst at London Capital Group.
Trade war rhetoric continues to escalate, after China hit back at President Trump last on Thursday, saying it will introduce its own trade barriers in response.
“China does not want a trade war with anyone,” the Chinese embassy in Washington DC said in a statement Thursday. “But China is not afraid of and will not recoil from a trade war. China is confident and capable of facing any challenge. If a trade war were initiated by the US, China would fight to the end to defend its own legitimate interests with all necessary measures.”