European stock markets have continued to react poorly to Donald Trump’s sweeping tariffs on countries across the world. Overnight, Asian markets plummeted amid fears that retaliatory measures could lead the world into a global trade war.
As markets opened this morning, European stocks continued the downward trend with investors and European leaders fearing that the measures could be set to stay. European shares dropped in early trading, with Germany’s DAX falling 6.5% to 19,311.29. In Paris, the CAC 40 shed 5.7% to 6,861.27, while Britain’s FTSE 100 lost 4.5% to 7,694.00. Meanwhile, Amsterdam's stock exchange was down 5.5%, Sweden's down around 7% with Denmark's also nosediving around 7%.
Shares in defence companies and bank are amongst the worst affected with German tank-maker Rheinmetall falling by nearly 24%.
Earlier this year, stocks in defence had risen amid a statement of intent by European leaders to increase defence spending.
Shares in banks such as Barclays and Natwest were also down during early trading, witnessing falls of 7-8%.
Such was the panic sweeping across the European markets, that every company listed in the FTSE 100, the biggest companies in the UK, saw their share price fall this morning.
The UK government has said it continues to negotiate with the United States in an attempt to delay or remove the blanket 10% tariff imposed on top of a 25% levy on vehicles delivered to the US.
Speaking in the early hours, President Donald Trump told reporters onboard Air Force One that the tariffs are a “medicine”.
He has previously stated his intention to place significant levies on countries he believes have a trade surplus with the United States.
A trade surplus relates to countries who export more of their goods to the United States than they import American goods to be sold in their own markets.
He said: "I don't want anything to go down. But sometimes you have to take medicine to fix something."
He added: "I spoke to a lot of leaders, European, Asian, from all over the world. They're dying to make a deal.
"We're going to have surpluses or, at worst, going to be breaking even."
