In a dramatic turn of events, London’s FTSE 100 plummeted by 4.95% on Thursday, marking its steepest decline since the March 2020 Covid lockdown. The stock market carnage follows former President Donald Trump’s shock announcement of sweeping new tariffs, shaking global markets and rattling investors.
The ripple effect hit major UK companies hard, with Rolls-Royce sinking more than 10% and mining giants like Antofagasta, Glencore, Fresnillo, and Anglo American all seeing significant losses, over 8%. The banking sector wasn’t spared either, with Barclays and NatWest both sliding nearly 8%.
The sell-off wasn’t confined to the UK. European markets also bore the brunt, with France’s CAC 40 dropping 0.92% and Germany’s DAX sliding 0.74%. Across the globe, Japan’s Nikkei 225 saw a sharp 4.3% dip, while US markets took a hit as well, with the S&P 500 and Nasdaq each falling by over 4% and 5%, respectively, erasing a staggering £1.5 trillion in market value.
Trump’s announcement of a 10% tariff on most US imports, coupled with a 25% levy on car imports, has sparked widespread panic among investors. Stephen Innes from SPI Asset Management described it as “the most aggressive trade shock the market has seen in decades.”
In response, Olu Sonola of Fitch Ratings warned that the ripple effects of these tariffs could plunge many countries into a recession.
Despite the market turmoil, Trump remained optimistic, declaring, “The markets are going to boom.” He even claimed that UK Labour leader Sir Keir Starmer was “very happy” with the tariffs. Starmer quickly fired back, saying, “The President of the United States acted for his country, and that is his mandate. Today, I will act in Britain’s interests with mine.”
The UK government is now preparing for retaliation, with a May 1 deadline for public consultation on possible tariffs, and a list of US goods identified as potential targets. Business Secretary Jonathan Reynolds affirmed that the UK reserves the right to take “any action deemed necessary” if no trade deal is reached.
China has already made its move, responding to the US tariffs with 34% tariffs on American goods starting April 10, as well as new export controls on rare-earth metals. The Chinese Commerce Ministry stated that these actions are aimed at protecting “national security and interests.”
As fears of a full-blown trade war escalate, the global market sell-off is deepening, and thousands of jobs in the UK, particularly in the car industry, are now under threat.
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