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Global stocks slide as Trump tariffs hit markets Trump tariffs trigger steepest drop for US stocks since 2020 as China, EU vow to hit back
(about 5 hours later)
Stocks around the world sank on Thursday as questions about how businesses and households will swallow the cost of new, sweeping tariffs in the US raised concerns about economic downturn. Watch: 'The country is going to boom' after tariffs, says President Trump
In the US, the S&P 500, which tracks 500 of the biggest American firms, was down roughly 3.5% in mid-day trade, as losses accelerated over the morning, with big consumer names such as Nike and Apple among the hardest hit. Global stocks have sunk, a day after President Donald Trump announced sweeping new tariffs that are forecast to raise prices and weigh on growth in the US and abroad.
The UK's FTSE 100 share index ended down 1.5% and other European markets also dropped, echoing falls seen earlier in Asia. The S&P 500, which tracks 500 of the biggest American firms, plunged 4.8% - its worst day since Covid crashed the economy in 2020. Earlier in the day financial markets fell from Asia to Europe.
While stocks fell, the price of gold, which is seen as a safer asset in times of turbulence, touched a record high. Nike, Apple and Target were among big consumer names worst hit, all of them sinking by more than 9%.
US President Donald Trump said he would impose a 10% tax on imports from around the world, and higher duties on dozens of other countries, including key trade partners such as China and the European Union. At the White House, Trump told reporters the US economy would "boom", as he stood by his decision to impose a minimum 10% tariff on imports, which he argues will boost federal revenues and bring American manufacturing home.
The new taxes include a 54% tariff on US imports from China and 46% on goods from Vietnam. The Republican president plans to hit products from dozens of other countries with far higher levies, including trade partners such as China and the European Union.
Markets across Asia fell sharply after Trump's announcement, with the Nikkei in Japan closing down nearly 3% and Hong Kong's Hang Seng index 1.5% lower. China, which is facing an aggregate 54% tariff, and the EU, which faces duties of 20%, both vowed retaliation on Thursday.
Shares in Europe followed the downward trend, with Germany's Dax index falling 3% by the end of the day and France's Cac 40 dropping 3.3%. Tariffs are taxes on goods imported from other countries, and Trump's plan that he announced on Wednesday would hike such duties to some of the highest levels in more than 100 years.
The price of gold hit a record high of $3,167.57 an ounce at one point on Thursday, before falling back to $3,090. "He's flipped the system": Americans react to Trump's tariffs
In the US, the Dow Jones dropped 2.8% in mid-day trade, while the Nasdaq tumbled more than 4%. The World Trade Organization said it was "deeply concerned", estimating trade volumes could shrink as a result by 1% this year.
The dollar also weakened against many other currencies. The pound rose by more than 1% against the US currency to touch $1.32 at one point before slipping back. Traders are also concerned about the global economic impact of Trump's tariffs, which they fear could stoke inflation and stall growth.
About a third of US imports, including goods from Canada and Mexico and items from key strategic sectors such as cars and steel, were not affected by Trump's announcement on Wednesday. On Thursday, the S&P 500 shed roughly $2tn in value, continuing a sell-off that has been ongoing since mid-February amid trade war fears.
But the White House said that was because Trump had already targeted them with separate tariffs, or plans to, as he doubles down on a high-stakes policy gambit aimed at reversing decades of liberalisation that shaped the global trade order. The Dow Jones closed about 4% lower, while the Nasdaq tumbled roughly 6%.
Traders are concerned about the global economic impact of Trump's tariffs, which they fear could stoke inflation and stall growth. Earlier, the UK's FTSE 100 share index dropped 1.5% and other European markets also fell, echoing declines in Asia.
"This is the worst-case scenario," said Jay Hatfield, chief executive at Infrastructure Capital Advisors. On Thursday at the White House, Trump doubled down on a high-stakes policy gambit aimed at reversing decades of US-led liberalisation that shaped the global trade order.
"I think it's going very well," he said. "It was an operation like when a patient gets operated on, and it's a big thing. I said this would exactly be the way it is."
Live updates: Reaction to Trump's tariffs announcement He added: "The markets are going to boom. The stock is going to boom. The country is going to boom."
On Thursday, Canada's Prime Minister Mark Carney said that country would retaliate with a 25% levy on vehicles imported from the US.
Trump last month imposed tariffs of 25% on Canada and Mexico, though he did not announce any new duties on Wednesday against the North American trade partners.
At a glance: The countries hit hardest by these plansAt a glance: The countries hit hardest by these plans
Voter reaction: 'So crazy' or a 'necessary evil'?
Analysis: The biggest change to global trade in 100 yearsAnalysis: The biggest change to global trade in 100 years
Watch: Three things to know about Trump's plans Your questions: What next for products like the iPhone?
Tariffs are taxes on imports. Analysts say firms now face a choice of swallowing the new cost, working with partners to share that burden - or passing it onto consumers, and risking a drop in sales. Firms now face a choice of swallowing the tariff cost, working with partners to share that burden - or passing it on to consumers, and risking a drop in sales.
That could have a major impact in the US and globally, where US consumer spending amounts to about 10% and 15% of the world economy, according to some economists' estimates. That could have a major impact as US consumer spending amounts to about 10% to 15% of the world economy, according to some estimates.
The measures could drag down growth in Europe by nearly a percentage point, with a further hit if the bloc retaliates, according to analysts at Principal Asset Management. While stocks fell on Thursday, the price of gold, which is seen as a safer asset in times of turbulence, touched a record high of $3,167.57 an ounce at one point on Thursday, before falling back.
It said it now expected growth in China of roughly 4.2%, down from 4.5% predicted earlier this year. The dollar also weakened against many other currencies.
Watch: Three things to know about Trump's tariffs announcement
In Europe, the tariffs could drag down growth by nearly a percentage point, with a further hit if the bloc retaliates, according to analysts at Principal Asset Management.
In the US, a recession is likely to materialise without other changes, such as big tax cuts, which Trump has also promised, warned Seema Shah, chief global strategist at the firm.In the US, a recession is likely to materialise without other changes, such as big tax cuts, which Trump has also promised, warned Seema Shah, chief global strategist at the firm.
She said that the inflation rate, currently at about 2.8%, could rise back to 4% by the end of the year. She said Trump's goals of boosting manufacturing was a years-long process "if it happens at all".
"While the administration's stated goal of the tariffs—reshoring manufacturing and the resulting capex boost to the economy—is certainly possibly, the reality is that the process will likely take years, if it happens at all," she said "In the meantime, the steep tariffs on imports are likely to be an immediate drag on the economy, with limited short-term benefit," she said.
"In the meantime, the steep tariffs on imports are likely to be an immediate drag on the economy, with limited short-term benefit." On Thursday, Stellantis, which makes Jeep, Fiat and other brands, said it was temporarily halting production at a factory in Toluca, Mexico and Windsor, Canada.
It said the move, a response to Trump's 25% tax on car imports, would also lead to temporary layoffs of 900 people at five plants in the US that supply those factories.
Nike, which makes much of its sportswear in Asia, was among the hardest hit on the S&P, with shares down more than 11%. On the stock market, Nike, which makes much of its sportswear in Asia, was among the hardest hit on the S&P, with shares down 14%.
Shares in Apple, which relies heavily on China and Taiwan, tumbled 7%. Shares in Apple, which relies heavily on China and Taiwan, tumbled 9%.
Other retailers also fell, with electronics chain Best Buy slumping 15% and Target down roughly 10%. Other retailers also fell, with Target down roughly 10%.
Motorbike maker Harley-Davidson – which was subject of retaliatory tariffs by the EU during Trump's first term as president and has been named as a potential target for retaliation this time – fell 7%. Motorbike maker Harley-Davidson – which was subject of retaliatory tariffs by the EU during Trump's first term as president and has been named as a potential target for retaliation this time – fell 10%.
In Europe, 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.In Europe, 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.
Among luxury goods firms, jewellery maker Pandora fell more than 10%, and LVMH (Louis Vuitton Moet Hennessy) dropped more than 3% after tariffs were imposed on the European Union and Switzerland.Among luxury goods firms, jewellery maker Pandora fell more than 10%, and LVMH (Louis Vuitton Moet Hennessy) dropped more than 3% after tariffs were imposed on the European Union and Switzerland.
Pandora said it expected the new tariffs to cost the firm roughly DKK 700m in 2025. It said it hoped to be able to reduce that hit, since about 250m DKK reflected goods that are sold in Canada and Latin America but shipped through the US. "You're seeing retailers get destroyed right now because tariffs extended to countries we did not expect," said Jay Woods, chief global strategy at Freedom Capital Markets, adding that he expected more turbulence ahead.
It said it was "actively exploring" further action, "including price increases and supply chain set-up".
Stellantis, which makes Jeep, Fiat and other brands, announced its own changes in response to the tariffs, saying it was temporarily halting production at a factory in Toluca, Mexico and Windsor, Canada.
It said the move would also lead to temporary layoffs of 900 people at five plants in the US that supply those factories.
"These are actions that we do not take lightly, but they are necessary given the current market dynamics," Antonio Filosa, chief operating officer for the firm in North America, wrote in a message to the company.