Donald Trump strikes again. This time, with the announcement of fresh 25% tariffs on all automobiles and parts entering the United States. The news wasn’t taken well by markets, and European equities started the session in the red after a poor session for US stocks overnight.
London’s leading index was down 0.6% at the time of writing, in line with poor performance across Europe.
Anything related to vehicle manufacturing was hit. FTSE 100 Melrose was down 2%, while German-listed BMW and Mercedes-Benz fell around 3%. US autos were also weaker, with Trump’s buddy Elon Musk’s Tesla falling 5% overnight, although it was higher in the pre-market.
Tesla shares are now down by around a third since Trump took office.
“The automotive industry has struck Donald Trump off their Christmas card list after he imposed 25% tariffs on cars and car parts coming into the US from April,” said Russ Mould, investment director at AJ Bell.
“It has caused shares in auto companies to go into reverse and weighed on financial markets, with Wall Street firmly in the red last night and Europe following suit on Thursday.
“Mexico, Japan, South Korea, Canada and Germany are the biggest suppliers of auto-related products to the US and stand to lose out if Trump doesn’t back down. It’s another blow to relations between the US and the rest of the world, and a further reason for investors to be gloomy.”
S&P 500 futures continued their decline during the European session.
A number of FTSE 100 stocks trading ex-dividend also weighed on the index. M&G shares fell 6% after the stock lost the rights to a monster 13.5p dividend. Taylor Wimpey, Schroders and Segro, among others, also traded ex-dividend
Next was the standout performer on Thursday after the retailer announced record profit before tax that surpassed £1bn for the first time in 2024.
The company outlined plans to return a substantial proportion of profits to shareholders through ordinary dividends and share buybacks, which resulted in Next shares jumping over 7%.
Marks & Spencer shares rose in sympathy with Next’s results in the hope that strong sales at Next would have some read across for M&S.