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The reverberations of President Trump’s latest tariff announcements have sent shockwaves through global markets, with multiple sectors facing significant operational challenges. The comprehensive tariffs, targeting 44% of US imports, are poised to reshape international trade dynamics and corporate profitability.
The automotive sector stands as one of the most vulnerable, with European manufacturers bearing substantial exposure. Volkswagen and Stellantis, with their significant Mexican operations, face potential operating income reductions of 12% and 40% respectively in 2025. The average vehicle cost in the United States is projected to rise by £2,100, creating additional pressure on consumer demand.
In the beverages sector, British giant Diageo faces exposure through its North American operations, which represent over one-third of its net sales. The estimated annual impact ranges between £390 million and £470 million, primarily affecting its imported spirits portfolio from Mexico and Canada.
The retail landscape appears equally challenging, with global fashion retailers like H&M, Primark, and JD Sports potentially facing decreased consumer confidence in the American market. The British Retail Consortium warns of mounting inflationary pressures that could ripple through global supply chains.
Cryptocurrency markets responded swiftly to the news, with more than £390 billion temporarily erased from total market capitalisation. Bitcoin experienced significant volatility, dropping to £71,500 before recovering to £79,200, while Ethereum witnessed a 5.6% decline.
The commodities sector showed mixed reactions, with major mining companies experiencing share price declines. Gold reached a historic peak of £2,205 per ounce, reflecting its status as a safe-haven asset during periods of market uncertainty. Oil prices demonstrated relative stability, though concerns persist about potential demand constraints in a trade war scenario.
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