Financial markets reacted immediately to the widespread implementation of new tariffs that US president, Donald Trump, announced on April 2. By Leatherbiz.

The Financial Times said the measures had sparked “a $2.5 trillion rout” on Wall Street, and that markets in Asia and Europe had also fallen sharply as investors sought “refuge from Trump’s tariff blitz”.

By midday on April 4, shares in Paris-based luxury groups LVMH and Kering had suffered falls of 6% and 8.5%, respectively. Footwear groups adidas and Puma saw falls of 12% and 10.5%, respectively. Shares in their US-based rival Nike fell by 15%.

President Trump called April 2 Liberation Day; he claimed the new tariffs would “supercharge our domestic industrial base” and bring to an end unfair competition from trading partners around the world. Business magazine The Economist changed the momentous occasion’s name to ‘Ruination Day’.

President of the European Commission, Ursula von der Leyen (pictured), has said there will be “immense consequences” for the global economy following the widespread imposition of new tariffs by the US.

The measures include a baseline tariff of 20% on most imports into the US from the 27-state European Union. Imports of EU-made cars and EU-produced steel will be subject to a 25% tariff.

In response, Dr von der Leyen said: “President Trump’s announcement of universal tariffs on the whole world, including the European Union, is a major blow to the world economy. I deeply regret this choice.”

She added that it was important to be clear-eyed “about the immense consequences the global economy will suffer”. She predicted that uncertainty will spiral and trigger the rise of further protectionism. “The consequences will be dire for millions of people around the globe,” she said.

The European Commission president went on to say that officials in Brussels were already finalising a first package of countermeasures, and were also preparing further countermeasures. These steps, she explained, were aimed at protecting EU interests and businesses if negotiations of a settlement with the US fail.

In Tokyo, prime minister, Shigeru Ishiba, said a new baseline tariff of 24% for exports to th US made this “a national crisis” for Japan.
For his part, the prime minister of Canada, Mark Carney, called the new tariffs “a tragedy”.

An economist and a former governor of the Bank of Canada and of the Bank of England, Dr Carney said: “The system of global trade anchored on the US is over. Our old relationship of steadily deepening integration with US is over. The 80-year period when the US embraced the mantle of economic leadership is over. While this is a tragedy, it is also the new reality. We must respond with both purpose and force.”