UK and European markets set for more turmoil after Trump’s tariffs unveiled
The Nikkei in Japan tumbled 3% and China’s Hang Seng was around 1.5% lower after Mr Trump’s self-declared ‘liberation day’.
Investors are braced for another day of turmoil on the UK and European markets after heavy falls in Asia following US President Donald Trump’s move to unveil sweeping trade tariffs across the globe.
The Nikkei in Japan tumbled 3% and China’s Hang Seng was around 1.5% lower after Mr Trump’s self-declared “liberation day” saw him announce hefty tariffs on imports into the US, including a 10% penalty for UK goods.
While the US markets closed higher overnight after volatile trading on Wall Street, pre-market futures trading pointed to sharp declines in Thursday trading, with the S&P 500, Nasdaq and Dow Jones all expected to open lower, dragged lower by retailers and big tech stocks.
Despite the market woes, the pound rallied against a weaker dollar, up 0.9% to 1.311 US dollars, but was 0.3% lower at 1.196 euros.
The US dollar was falling sharply against key currencies as traders reacted to developments from the US amid uncertainty over how global trade will be impacted by new tariffs, and how far affected countries will respond with retaliatory action.
Chris Beauchamp, chief market analyst at online trading platform IG, said: “Investors and businesses are waking up to a new world this morning after Trump’s tariff announcement.
“Investors have voted with their feet and have resumed the selling of US stocks despite a small overnight bounce.”
He added: “Should major partners like the EU impose higher costs then we can be certain the US will also respond in kind.
“Markets face the kind of trade war not seen for decades.”
Gold hit another fresh record as investors rushed into safe haven assets and with bullion also one of the few commodities exempted from the tariffs.
The precious metal raced to an all-time high of more than 3,167.84 US dollars an ounce at one stage.
Linh Tran, market analyst at XS.com, said: “Unlike previous trade tensions that mainly centred on US–China disputes, this round of tariffs is broader in scope, targeting multiple strategic industries such as electric vehicles, semiconductors, steel, and renewable energy.
“This has raised concerns not only about potential retaliatory measures from affected countries but also about the possibility of a deeper fragmentation of global supply chains in the years ahead.
“The market’s immediate reaction was a widespread shift into defensive mode, with capital flowing out of equities and risk assets and into gold — the traditional safe-haven asset.”
