London’s FTSE 100 Index tumbled down, plunging by 1.2 per cent during early trade on Monday, following concerns over a new wave of US tariffs uncertain global markets.
The blue-chip index fell 105.8 points to 8,568.2 after US President Donald Trump announced fresh tariffs and warned that the European Union could be next in line.
Trump did not rule out targeting UK goods but suggested that a resolution with Britain was possible, hinting that the situation “can be worked out.”
His latest trade moves follow the imposition of tariffs on Mexico, Canada, and China over the weekend, which also prompted retaliatory threats from these countries.
Trump’s tariff announcements have already rippled across global financial markets. Asian stocks took a hit overnight, with Japan’s Nikkei tumbling 2.8 per cent and Hong Kong’s Hang Seng down 1 per cent.
However, mainland Chinese markets remain closed until Wednesday due to the Lunar New Year holiday.
European markets are bracing for further declines as investors assess the risk of a global trade war. The pound slipped 1 per cent against a stronger US dollar, trading just under $1.23, though it gained 0.4 per cent against the euro, which is also weighed down by the tariff war.
Kathleen Brooks, research director at XTB, told The Mirror, financial markets are likely to react strongly to Trump’s tariff measures. She noted that while the FTSE 100 could be somewhat shielded due to its defensive nature and the absence of immediate UK-specific tariffs, the index still pointed to a 0.8 per cent decline at the start of the week.
“This does not mean that the UK economy will avoid impact from the tariffs, but it does mean that the UK economy could be more resilient than elsewhere. It’s too early to know exactly what impact tariffs will have on the global economy, but it is fair to say that they have a high potential of triggering inflation, and weighing heavily on global growth, including the US economy,” she said.
