Stocks spiral under fears of global trade war: Stocks in London closed sharply lower in the wake of plans from Donald Trump to impose tariffs on steel and aluminium imports. These plans have ignited fears of a global trade war. The US President defended his plans, describing the advantages of heightening competition in trade and vowing to match any responses to the taxes that other countries impose on American exports.
He spoke of his country’s annual losses of billions of dollars to countries it does business with, claiming that a trade war is good, and “easy to win“.
Countermeasures
The EU could trigger new tariffs in response as international condemnation of Trump’s plans ring out.
Stocks in the London market plummeted initially, including the FTSE 100 index, FTSE 250 and the AIM All-Share. There were also drops in the BATS UK 100, BATS 250 and BATS Small Companies.
S&P Index Live Price Chart
US Markets
Meanwhile, stocks in the US saw a tumultuous reaction themselves. New York stocks opened lower after President Trump’s speech, but they regained a little ground over the course of the trading session. Major indices climbed from their lowest pits of the session, but they remained in negative territory.
Analyst Views
Analysts say concerns over the prospect of a trade war put a downward burden on both the stock markets and the USD. Shares on Wall Street opened weaker, and the USD has lost ground against the yen and the euro. It is reportedly holding up better against other currencies, however, and it is generally likely that things will stabilise.
This is not the first time President Donald Trump has made bold statements that have impacted stocks across the globe. His ‘America First’ policy has seen him comment on things like the US embassy in Jerusalem, and his withdrawal from the Paris climate accord. He has shown himself to be a man who follows through on his words, so fears about a possible trade war are not unfounded.
As the coming weeks unfold, we will see to what extent his decisions, and the countermeasures of other countries, have on global stocks for traders.