Stocks were down globally on Thursday morning in Europe after US tariff announcements, while the French government said it was ‘ready for a trade war’ with the US and plans to ‘attack online services’ in response.
The FTSE 100 index opened down 97.98 points, 1.1%, at 8,510.22. The FTSE 250 was down 166.68 points, 0.9%, at 19,482.95, and the AIM All-Share was down 8.28 points, 1.2%, at 677.49.
The Cboe UK 100 was down 1.1% at 848.49, the Cboe UK 250 slipped 0.4% at 17,031.90, and the Cboe Small Companies was flat at 15,161.47.
US President Donald Trump on Wednesday announced sweeping and severe reciprocal tariffs as he pledged to ‘make America wealthy again.’ Trump said the US will calculate the combined rate of all other countries tariffs and ‘charge them roughly half of what they are charging us’
Brandishing a chart at the White House, Trump said the UK will face a 10% tariff, which will be the baseline, the European Union 20% and China 34%.
Other tariffs imposed include Vietnam at 46%, Cambodia 49%, Taiwan 32%, Japan 24%, South Africa 30%, India 26%, South Korea 25%, Thailand 36%, Switzerland 31% and Indonesia 32%.
The EU is ‘ready for a trade war’ with the US and plans to ‘attack online services’ in response to Donald Trump’s new tariffs, the French government spokeswoman said Thursday.
‘We are pretty sure that we are indeed going to see an adverse effect on production,’ Sophie Primas told broadcaster RTL, expressing particular concern about the ‘strong’ impact on wine and spirits.
‘We have a whole range of tools and we are ready for this trade war,’ she added. ‘Then we will look at how we can support our production industries.’
Trump ‘thinks he is the master of the world’, Primas added.
‘It is an imperialist stance that we had somewhat forgotten about but which is returning with great force and great determination.’
Trump also reiterated the US will impose a 25% tariff on all foreign-made automobiles.
Trump said ‘April 2, 2025, will forever be remembered as the day American industry was reborn, the day America‘s destiny was reclaimed and the day that we began to make America wealthy again.’ Trump said tariffs will bring back a ‘golden age’ for the US, and said jobs and factories ‘will come roaring back into our country.’
The new tariff measures will remain in place indefinitely, the White House said on Wednesday evening, until Trump has decided that ‘the threat posed by the trade deficit and underlying non-reciprocal treatment is satisfied, resolved, or mitigated’.
In the US on Wednesday, Wall Street ended higher, with the Dow Jones Industrial Average up 0.9%, the S&P 500 up 0.7% and the Nasdaq Composite 0.9% higher.
Meanwhile, the price of gold hit a new record Wednesday shortly after President Trump’s latest tariff announcement.
Gold crossed the previous record at around 2300 GMT and then continued to climb above $3,150 an ounce, hitting a high of $3,167.69 as traders piled into the safe haven asset amid a steep decline in stock market futures.
Gold was quoted at $3,123.44 an ounce, lower against $3,126.39.
‘The market’s immediate reaction was a widespread shift into defensive mode, with capital flowing out of equities and risk assets and into gold — the traditional safe-haven asset. Major gold ETFs like SPDR have recorded significant net inflows for three consecutive sessions, indicating that investors are buying gold not only due to inflation or interest rate concerns but also for its role as a systemic risk hedge, similar to past periods of political and economic turmoil,’ said XS.com analyst Linh Tran.
‘One notable aspect of this tariff action is the lack of any clear timeline or exit conditions, making the risks difficult to quantify. Meanwhile, some of the affected countries have already signaled potential retaliation, raising the probability that this could escalate into a multi-lateral trade war.
‘In this environment, gold is likely to continue attracting capital and potentially reach higher price levels in the near term. As policy risks become increasingly unpredictable, the precious metal is naturally reclaiming its role as the preferred safe haven — not only for individual investors but also for major central banks.’
UK Prime Minister Keir Starmer has told business chiefs that ‘clearly, there will be an economic impact’ from Donald Trump’s tariffs, but the government would respond with ‘cool and calm heads’.
Starmer told business chiefs in Downing Street that the US President ‘acted for his country, and that is his mandate.
‘Today, I will act in Britain’s interests with mine.’
He said the UK was ‘prepared’ and that ‘one of the great strengths of this nation is our ability to keep a cool head’.
The Business secretary said tariffs on the UK are a ‘disappointment’ and ‘a challenge’, but that the UK is in a ‘better position than a lot of other countries from what was announced last night, but I was still disappointed.’
A timeline for the UK to seal an economic deal to mitigate tariffs is ‘largely in the gift of the US’, Jonathan Reynolds told Times Radio.
The Federation of Small Businesses warned the move will deal a ‘major blow’ to small and medium businesses, who are already facing pressure from weak growth at home. Currently, 59% of small UK exporters sell into the US market, the FSB said.
‘Tariffs will cause untold damage to small businesses trying to trade their way into profit while the domestic economy remains flat,’ Tina McKenzie, the FSB’s policy chair said.
‘The fallout will stifle growth, hurt opportunities, and put a serious dent in the global economy. The UK government should now be ready to provide emergency assistance to any SMEs at risk of collapse.’
UK Trade secretary Jonathan Reynolds is due to address MPs on Thursday morning. He said on Wednesday evening that the UK is still seeking to do a deal with the US that ‘we hope will mitigate the impact’ of the tariffs, but that ‘nothing is off the table’ when it comes to a response.
Meanwhile, Downing Street suggested they had been vindicated in their approach to negotiating with the US in the hope of securing an exemption. The 10% tax facing UK goods is half that facing the EU.
In European equities on Thursday, the CAC 40 in Paris was down 1.8%, while the DAX 40 in Frankfurt was down 1.7%.
The EU is preparing countermeasures in response to new tariffs imposed by US President Donald Trump but remains open to negotiations, European Commission President Ursula von der Leyen said on Thursday.
Speaking on the sidelines of a summit with Central Asian leaders in Uzbekistan, she called Trump’s move a ‘major blow to businesses and consumers worldwide,’ adding that Europe was ready to respond and protect its interests.
She added that the tariffs will lead to millions of citizens facing higher grocery, medication and transportation costs, while inflation will rise and hurt the most vulnerable citizens.
The EU is already finalising its first package of retaliatory measures and is now preparing additional steps to protect its businesses if talks with the US fail, von der Leyen said.
In Asia on Thursday, the Nikkei 225 index in Tokyo was 2.8% lower. In China, the Shanghai Composite was down 0.2%, while the Hang Seng index in Hong Kong was down 1.6%. The S&P/ASX 200 in Sydney closed 0.9% lower.
China’s Ministry of Commerce said US tariffs violated international trade rules and were based on subjective and unilateral assessments by the US, calling them a typical act of bullying.
The ministry urged Washington to remove the measures and resolve disputes through dialogue, or it would take countermeasures to protect its rights and interests.
Similarly, Taipei has called the tariffs ‘highly unreasonable’ and plans to start ‘serious negotiations’ with Washington. Taiwan’s trade surplus with the US is the seventh highest of any country, reaching $73.9 billion in 2024.
The pound was quoted at $1.3126 early on Thursday in London, up from $1.2967 at the equities close on Wednesday. The euro stood at $1.0967, against $1.0855.
Against the yen, the dollar was trading at JP¥147.13 compared to JP¥150.00.
Currys was the FTSE 250’s top riser at Thursday’s market open, up 12%.
The electricals retailer now expects adjusted pretax profit at around £160 million for the 53 weeks ending May 3, upgraded from prior guidance between £145 million and £155 million. This would be up 36% from £118 million in the year ended April 27, 2024.
Nostra Terra Oil & Gas climbed 7.7% on Thursday morning.
Its working interest partner at the Pine Mills producing asset in Texas has agreed on a location to drill the Fouke 3 well. Planning is ongoing and operational work is likely to begin in the third quarter of 2025, Nostra noted.
The area is estimated to contain more than 300,00 barrels of oil and, if successful, can be produced at the mximum new field allowable rate of 124 barrels of oil per day - the same rates as initial production at the Fouke 1 and 2 wells.
Production at Pine Mills currently nets 90 bopd, while total company oil production for Nostra averages around 130 bopd.
Brent oil was quoted lower at $72.61 a barrel early in London on Thursday, from $74.66 late Wednesday.
At the other end, ValiRx slumped 11%.
The life science company has terminated a letter of intent with TheoremRx, as relates to an exclusivity period between the two companies for the proposed sub-license of ValiRx’s prostate cancer treatment VAL201.
The termination followed a decision by TheoremRx not to go forwards with an amendment to the LOI for the return of Taiwan territory and the maintenance of exclusivity in exchange for a $200,000 payment by March 31.
‘Whilst the decision to terminate the LOI is obviously disappointing, we have contingencies for this eventuality. Moving VAL201 into a prostate cancer focussed SPV will give us the opportunity to file and develop new, ValiRx owned, IP based on in house technical knowhow to reset the patent coverage back to 20 years with proof of concept data for Val201 2.0 and to seek new partnerships from a position of strength,’ said ValiRx Chief Executive Officer Mark Eccleston.
Still to come on Thursday’s economic calendar, a slew of composite PMI readings across the globe, plus US weekly jobless claims data.
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