Closing Post
Stocks in some European and Asian markets took a hit as investors digested the ramifications of Donald Trump’s vow to slap a 25% tariff on products from Canada and Mexico, and 10% on goods coming from China.
Shares in companies with signifcant operational links to the nations in Trump’s line of fire were the hardest hit, such as automotive firms and alcohol producers.
While in general markets in Europe and Asia were hit over fears that Trump could target more countries and spark a potential global trade war.
The announcement, made on Trump’s Truth Social platform, saw the dollar jump 1.5% against the Mexican Peso, 1% against the Canadian dollar and hit a four-month high against the Chinese Yuan.
Economists at IMG have estimated that if the full cost of the tariffs are passed on to consumers, then Americans will face having to pay $2,4000 more per capital annually for goods.
An exclusive poll for the Guardian found that consumers agree, with two-thirds of Americans polled saying that they think Trump’s tariffs will mean higher prices.
John Roberts, the boss of British online electrical goods seller AO.com, has said that if the tariffs on Chinese goods are implemented it could mean lower prices on electricals in the UK.
“Fundamentally if less product is being made in China and shipped to the US then they will want to find another home for that output which might reduce prices for us,” Roberts said.
Meanwhile, optimism amongst British retailers has hit a two-year low off the back of expectations of gloomy Christmas sales, and the prospect of the increase in Employers’ National Insurance contributions next April, according to the latest quarterly survey by the Confederation of British Industry (CBI).
And, the British government is expected to stick to headline targets for increasing electric car sales each year, but will consider adding extra loopholes to help carmakers, after a barrage of lobbying by the car industry.
Keir Starmer’s spokesperson on Tuesday announced that the government will bring forward the consultation on the zero-emission vehicle (ZEV) mandate which will look at changes to the rules which impose fines of up to £15,000 per petrol or diesel vehicle sold above a quota.
Carmakers have privately warned that they will miss the targets, forcing them to stump up millions of pounds to buy “credits” from rivals, or else pay the fines.
Updated
Wall Street has opened with a mixed reaction from investors to Donald Trump’s announcement to put a 25% tariff on products from Canada and Mexico, and 10% on Chinese imports.
The Dow Jones was down 0.29% at the opening bell with biotech company Amgen (11.3%), retailer Best Buy (7.9%) and General Motors (6.6%) among the biggest fallers in early trading.
The tech stock heavy Nasdaq opened up 0.28%, while the benchmark S&P 500 rose 0.21%, as investors started to weigh the US president-elect’s plan to impose the new tariffs on his first day in the White House on 20 January.
