European markets have slumped further after China imposed retaliatory tariffs on US goods, escalating the trade war sparked by President Donald.
Trump’s sweeping new tariffs. The UK’s FTSE 100 and Germany’s Dax dropped about 4%, with some companies seeing double-digit falls in their share prices.
The declines add to large falls seen on Thursday as markets continued to react to the uncertainty triggered by the US tariffs. Traders are concerned the tariffs will increase prices and weigh on growth in the US and abroad.
US markets had their worst day since the impact of the Covid pandemic in 2020, with the S&P 500 share index closing down 4.8% and the Nasdaq sinking by nearly 6% .
China’s retaliatory tariffs of 34% on all US goods from April 10 have sparked fears of a prolonged trade war. Investors are seeking safe-haven assets, including gold and government bonds. The dollar index steadied on Friday, rising by 0.1% after a sharp drop on Thursday .
The International Monetary Fund (IMF) has warned that the new tariffs “clearly represent a significant risk to the global outlook at a time of sluggish growth” .
As the trade war escalates, investors are bracing for further market volatility.