European stock markets saw a sharp decline on Wednesday following the implementation of US President Donald Trump’s new, significant tariffs, which sparked a global equity sell-off.
After a partial rebound the previous day, hopes that the US might ease some of the new tariffs were quickly dashed, causing indices to plunge. Paris and Frankfurt saw declines of around 1.8% in early trading, as EU goods now face a 20% tariff when entering the US. London dropped by 1.9%, following the imposition of a 10% tariff on the UK since Saturday.
Trump’s trade policies hit China particularly hard, with tariffs on Chinese goods now reaching 104%, escalating the US-China trade war.
Susannah Streeter, Hargreaves Lansdown’s Head of Money and Markets, noted that the deepening conflict between the world’s two largest economies has generated widespread pessimism. “Neither side seems willing to back down,” she said.
Concerns about a potential global recession have impacted various sectors, notably luxury goods, automakers, and financial institutions.
The pharmaceutical sector, fearing it might be the next target of Trump’s tariffs, also suffered. Major drugmakers, including UK-based AstraZeneca and GSK, saw their stock prices fall over 4%.
Other European companies were similarly affected. Novo Nordisk, the Danish pharmaceutical giant, dropped around 5% in Copenhagen, while French pharmaceutical firm Sanofi and German biotech company Sartorius saw declines of about 5%.
French semiconductor company STMicroelectronics and automaker Stellantis, which owns brands such as Fiat, Jeep, and Peugeot, lost over 3%. British oil companies BP and Shell also fell by more than 3%, as oil prices dropped in response to the negative market sentiment.
AFP
