Europe midday: Shares battered as Trump starts global trade war

(Sharecast News) - Trading screens were a sea of red as European markets plunged after US President Donald Trump ignited a global trade war. The pan-European Stoxx 600 index was down 2.12 % at 525. Germany's DAX slumped 2.23% as its car industry faced 25% levies, while Britain's FTSE 100 fell 1.5% and France's CAC-40 2.72%. The Eurostoxx 50, which covers the eurozone, was down almost 3%.

Trump on Wednesday unleashed a swingeing and bigger-than-expected "reciprocal" tariff policy, with a 10% minimum levy on more than 180 trading partners, accusing them all of "currency manipulation and trade barriers" and hitting some of the poorest countries in the world hardest, including 46% on Vietnam and 49% on Cambodia.

The new measures were in addition to new duties on steel and aluminium, extra charges for China and 25% tariffs on vehicle and spare parts imports. China now faces a real rate of 54% after Trump added a 34% reciprocal levy.

"Trump's bold attempt to reshape international trade has sent shockwaves through global markets. The effects of 'liberation day' are being felt far and wide, with Asian markets down overnight, European stocks under pressure in early trading, and US futures pointing to a big drop later today," said Matt Britzman, senior equity analyst at Hargreaves Lansdown.

"With tariffs reaching levels unseen in over a century, the US is poised to rake in an additional $600bn in tariff revenue in an optimistic scenario, or put that another way, that'd be a $600bn added cost for businesses or consumers to stomach."

Gold was still in high demand as investors sought safe havens amid the turmoil. The precious metal was up slightly at $3,123.22 as of 0732 GMT, after hitting an all-time high of $3,167.57. Meanwhile oil prices fell on fears of a global economic slowdown, with Brent crude down 0.16% to $74.37.

In equity news, shipping giant Maersk fell almost 10% with rivals Hapag-Lloyd falling 8.37% and DSV 5.5%. German sports brands Puma and Adidas slumped by 10%.

Luxury stocks were also hard hit, with Danish jeweler Pandora down 11%, Burberry 7%, LVMH 4% and Gucci owner Kering 3.5%.

Reporting by Frank Prenesti for Sharecast.com