Fresh sell-off on trade fears: Trump’s 50% EU tariff threat rattles markets

Stocks fell sharply yesterday after Donald Trump reignited the global trade war with the threat of a 50 per cent tariff on European Union goods.

The FTSE 100 immediately fell by more than 100 points before closing down 0.2 per cent, or 21.29 points, to 8,717.97.

Stock markets in Europe suffered bigger falls, with France’s Cac 40 and Germany’s Dax each down by more than 2 per cent. The Cac 40 closed 1.7 per cent lower and the Dax 1.5 per cent down.

Traders in New York were also unnerved by Trump’s renewed appetite for tariffs – coming after US deals with Britain and China that had seemed to signal a cooling in his approach. Wall Street’s Dow Jones index fell 0.4 per cent, the S&P 500 dropped 0.5 per cent and the Nasdaq slumped 0.6 per cent.

Apple shares slid nearly 3 per cent after the US President singled out the firm with a threat to impose a 25 per cent charge on any iPhone purchased in America not made in the country.

More than 60m are sold in the US annually but currently none are made there.

Fawad Razaqzada, market analyst at City Index, said: ‘All the optimism over trade deals wiped out in minutes – seconds, even.’

Neil Wilson, UK investor strategist at Saxo Markets, added: ‘This was not in most people’s playbooks.’ In a post on his Truth Social platform, Trump said the EU was ‘very difficult to deal with’ and ‘our negotiations with them are going nowhere’.

He also wrote: ‘I am recommending a straight 50 per cent tariff on the European Union, starting on June 1, 2025.’

Car makers were among the big fallers on European markets with Volkswagen down 3 per cent, BMW sliding by 3.7 per cent, Renault off by 1.2 per cent and Stellantis – owner of Vauxhall, Peugeot, Chrysler and Fiat – falling 4.6 per cent.

On the FTSE 100, British Airways owner International Airlines Group was among the big fallers, down 2 per cent, or 6.6p, to 319.8p.

Banks were also selling off yesterday, with Standard Chartered slipping 1.3 per cent, or 15p, to 1151p and Barclays down by 1 per cent, or 3.35p, to 323.3p.

Apple shares tumbled after Trump said in a post on social media: ‘I have long ago informed Tim Cook [chief executive] of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or any place else.’