Trump trade war sends markets lower
US stocks fell yesterday after the United States moved to impose metal tariffs on imports from Canada, Mexico and the European Union, prompting a tit-for-tat response from some of its trading partners.
US Commerce Secretary Wilbur Ross said a 25pc tariff on steel imports and a 10pc levy on aluminium imports from its allies would come into effect today.
Mexico retaliated with "equivalent" measures on farm and industrial products, targeting pork legs, apples, grapes and cheeses as well as steel.
The S&P 500 packaged foods and meats index dipped 2.3pc with all its 10 components in the red.
Kraft Heinz and Mondelez were the biggest lags on the index. The S&P Composite 1500 Steel index rose 0.3pc, led by gains in AK Steel and US Steel although it pared early gains after Mexico's retaliation. Shares of Boeing slipped 1.3pc and Caterpillar declined 1.9pc, dragging down the Dow Jones Industrials. "The market is worried about retaliation, they are looking for what would come from the EU side," said Zhiwei Ren at Penn Mutual Asset Management.
Friction between the United States and its trading partners have roiled financial markets, especially after US President Donald Trump in March decided to impose the metal tariffs.
A report yesterday said that Trump aimed to push German carmakers out of the United States altogether, after launching a national security probe last week.
European shares fell on the trade war concerns. Here though, CRH rose 3.7pc after the Irish building materials group announced it would streamline some European and American businesses by combining them, in a move to improve profit margins.