Donald Trump confirmed the fears from the market to new tariffs for its trading partners in the early hours of Tuesday. The new president of the United States announced on his social network, Truth Social, that one of his first actions, when he returns to the White House, will impose tariffs of 25% on Mexico and Canada, and 10% on China. Trump highlighted, in capital letters, that These new taxes will affect all products imported from these countries. Additionally, he threatened that “this tariff will remain in effect until drugs, particularly fentanyl, and all illegal immigrants stop this invasion of our country.” “Both Mexico and Canada have the absolute right and power to easily resolve this problem,” the Republican detailed in this publication. And despite not being on this list, European stock markets have suffered the consequences in their prices, he Ibex 35 was one of the most bearish of the day, losing up to 0.80%, although in Europe other sectors such as the automobile They were also punished.
In the Ibex 35, the companies that performed the worst during the session were ArcelorMittal and BBVA, since both companies have a high exposure to China and Mexico, respectively. The company of French origin lost 3.8%, while the bank lost 3.3% due to the importance of this country for its business on a bearish day for the financial sector.
In these generalized declines for Europe, the Cac 40 lost 0.9%, while the EuroStoxx 50 lost 0.8%. Monday’s increases, driven by investor optimism following the appointment of Scott Bessent as Treasury Secretary, a Wall Street veteran with experience in funds, were forgotten in the Old Continent given the prospects of higher tariffs for Europe. The sectors most affected on the day were basic resources together with the automobile, giving up 1.9% and 1.7%, respectively.
The automotive sector was one of the most penalized in the market of the great European reference, the Stoxx 600, and the declines were led by Stellantis, which lost 4.8%, while Volvo and Valeo lost 2.8% and 2.5%, each. In the year, European cars lose 16.4% due to the weakness of the European industry and the rise of cheaper Chinese vehicles. Analysts have already cut an average of 26% of profit estimates for all automotive companies on the Old Continent.
In the case of the sector retail It was the fifth with the most falls, losing 1.9% on the stock market, but together with automobiles they may be the most affected by Trump’s tariff policies. Bloomberg Intelligence analyst Holly Froum explains that now these taxes “could mean increased costs for electric vehicle manufacturers such as Volvo and Polestar and clothing makers Nike and Adidas,” as they “will likely face additional tariffs now that Donald Trump returns to the White House.”
“Trump has said he intends to impose tariffs of 10-20% on most imports and 60% on China, which could affect companies like Nike and Adidas, which buy 18% and 14% of their footwear in the Asian country,” according to the analyst from Bloomberg. Tariffs can also affect American companies, explains the expert, and that “Lululemon and Allbirds could also be seen affected by a proposed tariff of between 10 and 20% on imports from other nationsgiven that their products are largely made in Vietnam,” adds Froum.
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