Tariffs are to be imposed on steel and aluminium imported from Canada, Mexico and the European Union.
The President tweeted: “Brazil and Argentina have been presiding over a massive devaluation of their currencies. which is not good for our farmers. Therefore, effective immediately, I will restore the Tariffs on all Steel & Aluminum that is shipped into the U.S. from those countries.”
FTSE 100 closed in the red on Thursday as the Dow Jones Industrial Average slumped as President Donald Trump confirmed the US will impose tariffs on steel and aluminium from the EU, Mexico and Canada.
Global stock markets dropped after Trump’s announcement. The FTSE 100, which had been around half a per cent higher, was down 0.53 per cent by 3.30 pm while Germany’s Dax index was 1.69 per cent lower.
In the US, the Nasdaq index fell 1.14 per cent while the S&P 500 dropped 0.71 per cent. US markets were also shaken by worse-than-expected manufacturing data.
Trump’s decision ends the exemptions both countries secured from levies in May 2018, when the US President slapped tariffs of 25 per cent on steel and 10 per cent on aluminium on countries around the world.
The South American countries are the latest to draw Trump’s ire over their falling currencies. The US labelled China a currency manipulator in August, and in June, Trump accused the Eurozone of deliberately devaluing its currency to gain a trade advantage.
The tariffs come as a blow to Brazilian president Jair Bolsonaro, who has made an effort to be friendly with Trump. Brazil is the third-biggest exporter of steel to the US, meaning the tariffs could hurt the economy.
The UK’s top share index finished down around 11 points at 7,678.
On Wall Street, the Dow Jones is 227 points lower at 24,440, while the S&P 500 is up over 22 points.
“The confirmation from the White House that levies will be imposed on aluminium and steel from Canada, Mexico and the EU has hurt US indices. Protectionist policies have a history of damaging economies, and investors fear a backlash from the respective countries,” noted David Madden, an analyst at CMC Markets.
The levies will kick in at midnight tonight, and the announcement also sent European indices lower. The German DAX lost 178 points, while France’s CAC 40 shed almost 29 points.
The biggest loser on Footsie was Taylor Wimpey (LON: TW.), whose shares shed 5.49% to 190.15p as it went ex-dividend today.
The tariffs of 25% on steel imports and 10% on aluminium were announced in March by President Trump and apply to imports from Canada, Mexico and the European Union.
As political opponents of Trump have been quick to point out, all three are close allies of the USA. Some observers are also suggesting that German carmakers will be the next in Trump’s sights.
The shares climbed 18% to 6.48p after the debt-laden company said it continues to pursue “multiple lines of funding to complement the restructuring which the board expects to conclude positively in the short to medium term”.
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