Business World

Tuesday 22 May 2018

Trump trade tensions send top German index to six-month low

Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan
Traders work on the floor at the New York Stock Exchange (NYSE) in Manhattan

Danilo Masoni

European shares fell to new two-week lows yesterday after Donald Trump said the United States would impose tariffs on imported steel and aluminium, prompting worries about a global trade war.

Such concerns sparked a broad sell-off in Europe, weighing particularly on the export-oriented German DAX index, which fell 1.8 pc to a six-month low, while the broader pan-European STOXX 600 benchmark was down 1.2 pc.

Mr Trump said duties of 25pc on steel and 10pc on aluminium would be formally announced next week, sparking concerns of retaliatory moves from major trade partners such as China, Europe and neighbouring Canada.

"Markets are spooked more by the aggressiveness of the message and by its potential of sparking an extended trade war rather than just by the scope of the measures' economic impact," said JCI Capital fund manager Alessandro Balsotti, noting how steel and aluminium account for just 2pc of US imports.

All sectors were trading in negative territory, with cars leading the drop, weighed down by a 6pc slump in Italian-American car maker Fiat Chrysler on concerns that the US tariff move could increase its raw material costs.

Elsewhere, Germany's Volkswagen and Daimler and BMW and France's Peugeot fell more than 2pc.

Steel and aluminium stocks were also generally lower, with ArcelorMittal, Salzgitter and Norsk Hydro all down more than 2pc. Steel pipes maker Tenaris also fell 1.4 pc, giving up earlier gains. (Reuters)

Irish Independent

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