As investors weigh the potential worldwide ramifications of U.S. President-elect Donald Trump’s promises to increase tariffs on China, Mexico, and Canada, European equities opened lower on Tuesday.
By 8:10 a.m. London time, the regional Stoxx 600 was down 0.61% as all sectors except telecoms pulled back. Autos were the biggest losers, down 2.1%.
On Monday, the index had closed higher for the third consecutive session as Wall Street’s Dow Jones Industrial Average reached a fresh high due to global equity momentum.
Trump warned Monday night that he would end a regional free trade deal by threatening to levy a 25% tax on goods from Canada and Mexico and to impose an additional 10% tariff on all Chinese goods entering the United States as one of his first actions as president.
Economists have already warned that Trump’s fiscal proposal may have an inflationary effect, as the Fed may drop interest rates more slowly. Consequently, the U.S. dollar may appreciate vs other currencies like the euro and pound.
Source (CNBC)
