The FTSE 100 and other major European indices sank on Friday morning after Donald Trump announced he would impose a 5% tariffs on Mexican goods.
The measures would come into place 10th June starting with a 5% tariff which he says would gradually increase.
“Deciding that, if he can’t have a physical wall, he will create an economic one, Donald Trump announced that the US would be imposing a 5% tariff on all Mexican imports, with that tariff gradually increasing ‘until the Illegal Immigration problem is remedied’. This news basically came out of nowhere, especially since last November saw the President sign the United States-Mexico-Canada Agreement, with that deal now potentially completely upended.” said Connor Campbell, Market Analyst at Spreadex.
FTSE 100 sinks
Markets reacted violently to the shock news with the FTSE 100 falling as much 1% in early trade.
As of 10.05am in London trading on Friday, 90% of the FTSE 100 constituents were down on the day in a broad based sell off.
Some positivity could be observed in Whitbread who announced a £2 billion tender offer in an effort to return further cash to shareholders.
European markets fell in tandem with the Footsie as the German Dax and French CAC fell substantially more than 1%.
Short-term disruption and long-term damage
The fall in equity markets came as the Confederation of British Industry (CBI) warned a no-deal Brexit would lead to ‘severe’ and ‘long-term damage’ to small British businesses.
“Firms large and small are clear that leaving the EU with a deal is the best way forward,”
“Short-term disruption and long-term damage to British competitiveness will be severe if we leave without one” wrote the CBI Director-General, Carolyn Fairbairn.
This is a message the CBI has carried for sometime but latest instalment comes as the Conservative party embarks on a leadership contest with the majority of participants backing the option of a no-deal Brexit.
