MARKET WRAPS
Stocks:
European stocks fell following a wider-than-expected raft of tariff announcements from President Trump, marking a sharply protectionist turn for global trade.
Trump outlined a 10% baseline tariff plus tailored duties on individual economies and goods-sectors, which will make up an effective U.S. tariff rate of around 25% all told, according to Capital Economics.
"Markets have seen a strong risk-off reaction to the tariff announcement, " Deutsche Bank said. "Trump's comments did leave the door open for potential negotiations to lower tariffs but his executive order also left room for further escalation."
European Commission President Ursula von der Leyen called the move "a major blow to the world economy," and said the bloc is ready to respond .
Stocks to Watch
Adidas shares fell 9.5% after Trump placed a 46% tariff on exports from Vietnam, where the German shoe maker has production sites.
European luxury companies [https://European luxury companies face a squeeze on marrgins from tariffs.] face a squeeze on margins from tariffs. Prada and Richemont fell 4%, while Burberry and Swatch were down 3.8%.
Oil stocks slid on concerns of a global economic slowdown. BP lost 2.1%. Shell and TotalEnergies slipped 1.6% and 1.1%, respectively. Eni was down 1%.
T ransport and logistics companies also sank. A.P. Moller-Maersk fell 7.1%, Deutsche Post was down 4.2% and Kuehne + Nagel fell 3.6%.
Economic Insight
Europe faces a recession risk after Trump unveiled steep tariffs on imports from the EU and the U.K., Barclays said.
ING said the 20% tariff on all exports to the U.S. is a major blow to the European economy, trimming its forecasts for eurozone growth ahead.
The consequences will hinge much on counter-measures but will certainly in the near term be depressive for growth.
The 20 members of the eurozone are likely to book GDP growth of just 0.6% this year and 1.0% in 2026, down from projections of 0.7% and 1.4%, respectively, ING said.
Reciprocal tariffs make central bank interest-rate cuts difficult , Pepperstone added, noting the potential for a tit-for-tat trade war across the globe.
However, Capital Economics said the move could also spur new cuts to interest rates across the world's developed economies in an attempt to boost growth.
Market Insight
Tariffs represent a massive burden for auto companies , marking a fundamental break in trade policy, said German automotive industry association VDA.
U.K. car manufacturers might have to review their output in the face of constrained demand, while U.S. consumers may face additional costs , U.K. industry body the Society of Motor Manufacturers and Traders added.
Trade organization spiritsEurope said the spirits sector is particularly vulnerable to tariffs, given that it is highly integrated across the Atlantic.
U.S. Markets:
Stock futures plunged following tariff announcements.
Recession and inflation are now more likely in the U.S., the Franklin Templeton Institute said.
"Tariffs do not work if prices do not increase."
The average American family may pay up to an estimated $4,200 more per year because of tariffs, assuming an average 20% tariff rate on imports, it said.
"Tariffs, therefore, will likely slow household and business spending and we expect them to increase the risk of U.S. growth and earnings disappointments in 2025."
Forex:
The euro rose to a near six-month high against the dollar. The currency is a big, liquid alternative to the dollar and consumption concerns are stronger in the U.S. than the eurozone, ING said.
However, "we don't really buy into the story that the worst is out of the way for Europe."
The dollar fell to a near six-month low after Trump's tariff announcements.
"The outcome was worse than expected and it raises the risk for a U.S. recession."
However, it will take time to see the ultimate impact of these measures on the currency, Commerzbank added.
The Canadian dollar rose to a five-week high against the U.S. dollar, with Canada noticeably absent from tariff announcements.
The Swiss franc strengthened to a five-month high as increased demand for safe havens offset Trump's 31% levy on Swiss imports.
The pound rose to a near six-month high against a weaker dollar but falls against the euro.
Bonds:
Eurozone government bond yields fell at opening but by less than their U.S. peers amid trade concerns.
"The staggering tariffs on each country scream 'negotiating tactics,' which will keep markets on edge for the foreseeable future."
The 10-year gilt yield dropped to a 4-week low, tracking declines in Treasuries and eurozone government bonds, as investors flee equities and move into safe haven assets amid trade concerns.
Energy:
Oil futures fell as U.S. levies raised concerns over a global economic slowdown that could crimp demand for crude, prompting traders to shed riskier assets in favor of safe-haven investments.
Metals:
Gold fell due to some profit-taking after hitting a fresh peak of earlier in the trading session.
However, escalating trade risks and geopolitical uncertainty will continue to drive gold's rally in the near-to-medium term.
EMEA HEADLINES
How Might Central Banks React to Trump's New Tariffs?
Increased tariffs raise prices in the country that imposes them, and reduces economic activity in the country they target.
That is about as much as central banks around the world can be certain of as they respond to President Trump's new duties on imports to the U.S., which threaten to rewire the global economy in unpredictable ways.
Trump Tariffs Aim to Bring Down Curtain on Era of Globalization
President Trump's biggest tariff blitz yet sends a clear message to U.S. and foreign companies alike: The era of globalization is over.
Trump's "Liberation Day" plan to impose sweeping new duties on trillions of dollars in imports shows that the White House wants goods sold to American consumers to be built in American factories-bringing down the curtain on U.S. support for the turbocharged globalization that powered the world economy for decades.
China Says It Has Agreed to EV Tariffs Negotiations With EU
China's commerce ministry has said that China and the European Union have agreed to restart negotiations on electric-vehicle tariffs, coming hot on the heels of Trump's announcement of more tariffs.
The Chinese Ministry of Commerce said at a press conference on Thursday that talks will start as soon as possible, and aim to foster a good environment for Chinese and European companies to invest and work together.
Thales to Recruit 8,000 People in 2025 to Support Rapid Growth
Thales outlined plans to recruit 8,000 people this year, with half of them joining the company's sites in France and U.K.
The French aerospace and defense group said Thursday that its worldwide hiring push is needed to support the company's growth across its three business segments.
GLOBAL NEWS
Global Markets Fall on Worse-Than-Expected U.S. Tariffs
U.S. stock futures and global equities markets tumbled along with the dollar and Treasury yields following the Trump administration's sweeping tariffs, which were harsher than expected.
-S&P 500 stock futures were last down around 3% and Dow Jones Industrial Average futures were off 2.2% premarket.
Oil Slumps on Demand Fears After Trump's Tariff Blitz
Oil prices fell sharply after U.S. President Trump unveiled plans to impose sweeping tariffs on major trade partners, stoking fears that an escalating global trade war will hurt economic growth and demand for crude.
In early European trade, Brent dropped 3.2% to $72.53 a barrel, while West Texas Intermediate was down 3.4% at $69.24 a barrel.
Trump Officials Gave Conflicting Tariff Rates for China. White House Calls the Issue a 'Pointless Aside.'
What does President Donald Trump's new tariff regime mean for the all-important trading relationship with China-the country that has the widest trade deficit with the U.S.?
In the immediate aftermath of Trump's tariff announcement, confusion reigned even among some White House officials about what rate the approximately $440 billion in Chinese imports would face. Policy experts were perplexed, too.
Some GOP Senators Break With Trump to Reject Canada Tariffs
WASHINGTON-A handful of Republican senators broke with President Trump on trade policy, joining with Democrats to pass a resolution aiming to undo the president's 25% tariff on Canadian imports.
The 51-48 vote to approve the measure took place just hours after Trump imposed a 10% baseline tariff on all imports to the U.S., and higher rates for some nations. It marked a significant rebuke of the president's expansive effort to overhaul U.S. trade policy with friends and foes alike.
Senate Pencils In $5 Trillion for Tax Relief, Leaves Blank Spaces for Spending Cuts
WASHINGTON-Senate Republicans rallied behind a fiscal framework that allows more than $5 trillion in tax cuts over a decade, taking a crucial step toward turning President Trump's agenda-tax cuts, border security and national defense-into law.
But the GOP budget resolution released Wednesday won't be the final word along the complicated path to a major tax and spending bill. The plan employs a controversial accounting maneuver, postpones decisions about spending cuts and conflicts with a competing House plan.
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This article is a text version of a Wall Street Journal newsletter published earlier today.
(END) Dow Jones Newswires
April 03, 2025 05:07 ET (09:07 GMT)
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