Liberation Day has arrived, and Donald Trump announced his distribution of tariffs to his trading partners (around 60 countries). The average tariff, around 23%, is the highest duty imposed in over a century. While these measures will take effect starting next Saturday, their impact has already fully hit markets worldwide: from a session of widespread losses in Asia, a red contagion has reached European markets, now extending to Wall Street.
In the consumer and retail sector, Nike has reduced its value by 1.3% and Amazon by 7.7%. In the automotive sector, Stellantis experienced one of the most notable declines, at 3.45%.
Before Wall Street, European markets opened with significant declines, which continued into mid-session (some even more pronounced). Among the main ones, the Paris stock exchange fell by 2.36% (compared to the initial drop of 2.14%), Frankfurt reduced its decline to 1.92% (initially down 2.14%), Milan by 1.92% (previously -1.85%), and London by 1.44% (-0.90% at the opening). Losses in the British market are not as severe compared to the rest, as the UK will face tariffs of 10%, the lowest in Trump's proposed tariff list.
The Ibex opened with a 1.58% drop, which by mid-session managed to cushion to 0.98%. The most affected stocks on the Madrid Stock Exchange at mid-session were ArcelorMittal (-3.75%), IAG (-3.75%), and Bankinter (-3.42%). Compared to the opening, there has been a change in the order of companies with declines, initially led by CaixaBank and Santander (now with drops of 2.85% and 3.27%, respectively).
Banking and consumer sectors continue to be the most affected. In the case of the former, it is dragged down by fear of recession and reduced economic activity. For the same reason, companies focused on fashion or tourism are also facing a critical day.
Against the trend, meaning in green, during the mid-session of the Spanish selective index, Solaria (+3.42%), Colonial (+3.12%), Cellnex (+2.78%), and Grifols (+2.53%) have risen, maintaining the positive tone from Thursday encouraged by the latest news on Brookfield's takeover bid.
Experts point out the high levels of volatility reflected in the market through the VIX, the fear index, which had already surpassed 23 points at the opening (indicating instability). For a more tangible aspect of this uncertainty, one only needs to look at the value of safe-haven assets, such as gold: its price has surged to set a new all-time high, nearing $3,200 per ounce.
There is still room for negotiation in the coming days before the reciprocal tariffs take effect. Few doubts remain about Trump's intentions with his tariffs, aiming to bring production back to the US, but analysts already warn of the (very negative) short-term impact on US economic growth. The risk of recession and inflation is almost tangible, and the consequent impact on consumers is evident, even though in the medium term, the American industry may strengthen, according to analysts at Renta4, "the question is how much damage Trump is willing to bear, in the short term, to his own economy."
At the opening of the stock market, within the commodities market, the price of a barrel of Brent crude oil fell to $72.66 (-3.06%), and Texas crude dropped by 3.29% to $69.35. In the currency market, the euro was trading at 1.0982 dollars. In the bond market, the yield on the Spanish 10-year bond stood at 3.275%; at the opening, the German yield also experienced a sharp drop, settling at 3.5%.
Before the opening of Western markets, the Asian stock market session takes place, the first to feel the impact of Trump's new measures. Yesterday, the American president announced a particularly harsh reciprocal tariff for China: a duty of 34% added to the existing 20% rates. As a result, Chinese imports will be subject to a total duty of 54%. Taiwan (the main semiconductor producer) will face a 32% duty, while India will face 26%, and Japan 24%.
Overall, the main Asian indices experienced a Thursday with significant losses: up to 1,449 companies were adversely affected in Thursday's session, as reported by the Efe agency. Japan's benchmark index, the Nikkei, suffered losses of 3%, while China's Hang Seng dropped by 2.05%. Vietnam was the hardest-hit country, with its main index, the VN, plummeting by 6%.
Automotive companies, directly impacted by the 25% tariffs in effect from this Thursday, suffered significant losses in Asia: for instance, Toyota, the world's leading vehicle manufacturer by sales volume and market capitalization in Tokyo, dropped by 5.19%, while Honda and Nissan lost 2.38% and 3.59%, respectively. However, the wave of declines also affected technology and consumer companies. For example, the video game company Nintendo fell by 3.26%.
"The tariffs announced last night represent a more negative scenario than what the market was expecting, and therefore the immediate reaction at the market opening today is significant declines in the stock markets," explain analysts at Bankinter. They add: "In short, this scenario of a tariff war, and pending the reaction of the countries affected by them, implies a short-term worsening of the global economic cycle and a generalized increase in inflation."