Shares in European automakers are plummeting following President Trump’s threat to impose 25% tariffs on imports from the EU, particularly on cars. This announcement has caused Germany’s DAX index to drop by 1.2%, with carmakers like BMW, Porsche, Volkswagen, and Mercedes-Benz leading the decline. Other car giants like Stellantis and Renault are also experiencing losses. The lack of clarity surrounding the policy is causing concern, with the aim of closing the US’s trade in goods deficit with the EU, second only to China. Germany, with the highest goods exports, is likely to be significantly impacted. Trump’s claim that the EU was formed to harm the US has raised eyebrows, with many pointing out the actual historical motivations behind the EU’s formation.
In other news, concerns regarding the impact of new US tariffs on the eurozone were discussed at the European Central Bank’s last meeting, with fears of global trade being severely affected. The potential economic turmoil resulting from a trade war between the US and the EU has been highlighted by the Kiel Institute for the World Economy, warning that both economies would experience contraction. Meanwhile, France’s industry minister is advocating for increased protection for Europe’s steel sector, and Polish Prime Minister Donald Tusk has responded to Trump’s claims about the EU’s intentions, emphasizing the importance of peace and fair trade.
On the UK front, Gatwick airport may receive approval for a second runway potentially adding over 100,000 flights per year, and Rolls-Royce has reported a significant financial recovery, prompting the resumption of dividends and a share buyback scheme. Conversely, WPP shares have fallen after missing sales forecasts, and Ocado has reported another annual loss, disappointing investors. Overall, uncertainty in the markets persists due to trade fears and economic instability.
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