Stock Markets Tumble As Tariffs Start and More Due on Wednesday

Stock markets across the World have tumbled today with President Trump’s US tariffs starting tomorrow.

At the time of writing (1.20pm),

• FTSE 100         -1.48%
• FTSE 250         -1.99%
• Dax                  -2.05%
• CAC                 -2.02%
• Shanghai Comp.-0.48%
• Hang Seng        -1.31%
• Nikkei 225         -4.08%

US markets open in just over 1 hour and we expect them to fall too.

Added to tariffs starting tomorrow, President Trump has suggested he will make further announcements on Wednesday for even more tariffs.

Comment

Tariffs are going to make goods and services more expensive in both the US and around the World as many trade partners will likely respond with further tariffs.  This means that higher inflation looks set to stay and therefore, interest rates will remain higher.

Japan has been badly affected as the Bank of Japan was rumoured to be on the verge of increasing interest rates anyway, and with tariffs hitting them hard on car and other exports to the USA, the Nikkei has suffered.

We understand why Trump wants to protect the US economy and to reduce the trade deficit with most of the World.  The simple fact is that if money ‘flows’ out of the USA, they become poorer and borrow more whilst other nations get richer.  That said, higher prices in the USA will also hurt the US people too.  Long term though, we believe rebalancing trade is a long term good thing for the USA economy.

Trumps negative stance on tariffs and the defence of Europe is designed, and we believe is working, as a ‘wake-up’ call to Europe and the World to get their own ‘houses in order’ and have less reliance on the USA.