Tariffs Tension: A Global Market Shake-Up

The UK stock indexes fell from recent highs after Donald Trump announced new tariff plans, affecting sentiment across global markets. U.S. tariffs on imports from Canada, Mexico, and China led to currency shifts and declining European stocks. UK retailers' confidence also dipped amid economic uncertainty.

UK stock indexes fell from multi-week highs following President-elect Donald Trump's announcement of new tariffs. The FTSE 100 and the FTSE 250 midcap index experienced drops of 0.4% and 0.9%, respectively, as investors reacted to increased market risks.

Trump's proposed tariffs include a 25% levy on goods from Canada and Mexico, as well as an additional 10% duty on imports from China. This move created pressure on European stocks, particularly affecting China-exposed automakers. The U.S. dollar strengthened against the Mexican peso and the Canadian dollar.

Investment analyst Dan Coatsworth noted investors' previous perception of Trump's tactics as mere threats, while admitting the president-elect's seriousness in implementing the tariffs. In the UK, perceptions of economic stability waned among retailers, as they anticipated higher costs and lower consumer demand.

(With inputs from agencies.)