UK and European markets fall as Trump’s tariff hike reignites trade tensions

UK and European shares slipped after Donald Trump announced plans to double tariffs on steel and aluminium, reigniting fears of a renewed global trade war.

The FTSE 100 edged down 0.1%, while the FTSE 250 lost 0.2%. The tariff increase—from 25% to 50%—weighed particularly on mining stocks across the FTSE 350, while European steelmakers ArcelorMittal and Aperam dropped around 1% each.

In continental Europe, the CAC 40 in Paris fell 0.5%, and Frankfurt’s DAX declined 0.4%, as China accused the US of breaching a recent trade agreement made in Switzerland—just days after President Trump levelled a similar accusation against Beijing.

The automotive sector was hit hardest, with Stellantis in Milan down 3%. Shares in Mercedes-Benz, BMW, and Volkswagen slid between 1.4% and 2%. Luxury goods makers—heavily reliant on US exports—also fell, with the sector down around 1.6%.

“The latest announcement renews tensions… it’s also an indication that the trade negotiations may not be going toward the right direction,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank.

She added: “Trade tensions have a very direct impact on luxury sales, because for the biggest exporters among major European companies, America is one of the largest markets.”