Stock markets across Europe fell sharply on Friday after US President Donald Trump threatened to impose sweeping 50% tariffs on goods imported from the European Union. Citing stalled negotiations, Mr Trump announced that the tariffs would come into effect on 1 June, sparking investor panic and a broad sell-off.
London’s FTSE 100 dropped by 21.29 points to close at 8,717.97 – a 0.24% decline – as traders reacted to the surprise announcement. The blue-chip index joined global markets in retreat, with Germany’s DAX tumbling 1.61% and France’s CAC 40 down 1.65%.
Mr Trump said talks with the EU on trade had made little progress and accused the bloc of “dragging its feet.” His latest tariff proposal marks a significant escalation in transatlantic trade tensions, which had previously simmered at lower levels.
“Discussions with the European Union are going nowhere,” he declared on Friday. “From June 1st, we will impose a 50% tariff on all EU imports to the United States.”
The US president had initially proposed a 20% levy on EU goods earlier in the year, before lowering it to 10% to allow time for further discussions. Friday’s declaration indicates that those talks have now collapsed.
In a further move likely to stoke tensions with multinational businesses, Mr Trump also said a 25% tariff would be applied to Apple iPhones manufactured outside the US.
“I have long ago informed Tim Cook of Apple that I expect their iPhones sold in the United States of America to be manufactured and built in the United States – not India, or anyplace else,” Mr Trump said.
Markets were quick to react. On Wall Street, the S&P 500 was down 0.81% and the Dow Jones slipped 0.69% by the time UK markets closed.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said the announcement had rattled investors.
“Trump’s aggressive stance towards Europe has sparked fresh fears that punishing tariffs could become a reality for the bloc,” she said.
“Even though the US president has become known for a harsh bark but a less painful bite, it does seem as though talks have hit an impasse – and that’s sparked a sell-off.”
She warned that markets were beginning to price in the prospect of a renewed trade war, with serious implications for global supply chains and economic growth.
Sterling, meanwhile, climbed amid expectations that US economic disruption could eventually weigh on the dollar. The pound was up 0.68% against the greenback to $1.3511 and edged up 0.07% against the euro to €1.1904.
Despite the wider market volatility, there were some standout performers in company news.
Shares in AJ Bell surged 8.4% to 495.60p after the investment platform revealed a jump in customer numbers and a new record in assets under administration. The firm said it had added 51,000 new clients in the six months to March – a 9% rise – taking the total to 593,000. Assets under administration climbed to £90.4 billion, largely driven by £3.3 billion in net inflows.
Elsewhere, Games Workshop, the company behind the popular Warhammer franchise, said it would pay out approximately £20 million to staff as part of a bonus scheme linked to strong financial results.
More Read
The Nottingham-based business said all staff would receive an equal share of the payout in recognition of their contribution. Despite the good news for employees, shares in the group dipped 3.21% to 15,360p amid broader market weakness.
The FTSE 100’s top risers included Anglo American, up 71.5p to 2,191.5p; Endeavour Mining, up 72p to 2,260p; and Fresnillo, which gained 27p to finish at 1,133p. ConvaTec and Rentokil also posted modest gains.
Among the worst performers were JD Sports, down 2.58p to 82.58p; Prudential, down 24.4p to 826.4p; and Mondi, which fell 30.5p to 1,183p.
With tensions escalating and investors increasingly wary, attention will now turn to whether the White House follows through on its tariff threats – and how the EU may respond.
