European stocks nosedived on Friday after Donald Trump escalated the trade war with fresh tariffs on a further $300 billion of Chinese goods set for September.
The Stoxx 600 SXXP, -1.86% and the FTSE 100 UKX, -1.70% plunged 2%, while the DAX DAX, -2.42% suffered worse losses, plummeting 2.4%.
What’s moving the markets?
Donald Trump announced fresh 10% tariffs on a further $300 billion of Chinese goods on Thursday, sending markets plummeting.
In a surprise Tweet, Trump said the tariffs — on the remaining Chinese products coming into the U.S. — would be enforced from the beginning of next month.
See also: New Trump tariffs threaten U.S. consumer, spelling wider trouble for stocks, analysts say
Asian markets tumbled following the President’s intervention, paving the way for the ugly European opening.
Miners and utilities stocks were the only ones to avoid the bloodbath.
Speaking to MarketWatch, Nick Hyett, equity analyst at Hargreaves Lansdown, said: “The increasingly hostile trade environment is, as you might expect, boosting haven assets with gold and gold miners both doing well.
“Meanwhile poorer than expected numbers from Royal Bank of Scotland and Crédit Agricole are weighing on the banking sector—an industry whose exposure to the economic cycle puts it right in the track of any economic downturn Trump’s trade war creates.”
Trump is also expected to make an announcement on European Union trade later on Friday, which could have further consequences for stocks.
Which stocks are active?
Royal Bank of Scotland RBS, -5.71% slid 6.4% despite unveiling a £1.7 billion dividend for shareholders and a strong set of first-half results. The lender warned that weakening economic conditions ahead of Brexit and trade tensions between the U.S. and China made next year’s profit targets “very unlikely.”
Car part suppliers were among the continent’s sharpest fallers as Faurecia EO, -6.74% and Valeo FR, -6.62% dropped more than 6%. Faurecia builds seats for China’s largest electric carmaker BYD and generates much of its revenue through Chinese sales.
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