Global stock markets turn bearish on confirmation of Trump’s tariff move

by | 2 Mar, 2018

In a meeting with executives from companies including U.S. Steel and Nucor yesterday, President Trump confirmed expectations that he would push ahead with a Commerce Department recommendation to put tariffs on steel and aluminium imports from China and other nations. Trump said he had settled on 25 percent for steel and 10 percent for aluminium and that the tariffs would be active for “a long period of time”.

The President is expected to sign orders confirming the changes into law as soon as next week. Though the decision has been met with some support, even from Democratic Senators like Bob Casey, markets have been hit by fears of a trade war between China and America.

In Europe today the FTSE MIB and DAX shed the most points both falling over 2 percent, while Japan’s Nikkei was Asia’s largest casualty falling 2.50 percent.

The recovery in stocks since this month’s market correction has come to a screeching halt. The President isn’t worried by the prospect of a trade war though, judging by this Tweet, but others will be, particularly those who worry of higher costs for American manufacturers. Many companies including airplane makers (like Boeing) and beverage companies (like PepsiCo) use steel and aluminium in their products, so the ramifications of this trade move from Trump can’t be underestimated.

In the currency markets, the Dollar slid today against the Euro, Pound, Indian Rupee and Swiss Franc, though it picked up gains against the Mexican Peso as investors became concerned about the prospects for a NAFTA agreement in light of his tariff move. In the U.S. equity markets, the key American indices are on track for 2 percent plus weekly losses. U.S. stocks are poised to open sharply lower today with futures falling for the Dow Jones, S&P500 and Nasdaq.

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ALL RIGHTS RESERVED © INVSTR LTD. 2018

Risk Disclosure:
Invstr is a technology platform, not a registered broker-dealer or investment adviser. Invstr does not offer its own recommendations of any security or provide its own research to any user regarding any security transaction or order.
Please note, investing involves risk and investments may lose value. Past performance does not guarantee future results.
Brokerage services are provided by the following:
US-traded securities, including fractional trading, are provided to Invstr users by DriveWealth LLC, a regulated member of FINRA/SIPC. DriveWealth may not establish investment accounts to residents of certain jurisdictions. For more information, including disclaimers, risk and transaction fees click here.
India account traded securities are provided by SIC Stocks & Services PVT Ltd. SIC does not make any personal recommendations to buy, sell or otherwise deal in investments. Investors make their own investment decisions. The services and securities provided by SIC may not be suitable for all customers and, if you have any doubts, you should seek advice from an independent financial adviser. For more information and disclaimers, click here.

 

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