ISEQ falls sharply following Donald Trump tariff threat
The ISEQ Index of Irish shares fell sharply by 1.5% in the aftermath of US president Donald Trump threatening to impose a 50% tariff on US imports from the EU, starting on June 1.
Shares in the three pillar banks were among the hardest hit on Friday with PTSB down nearly 5%, Bank of Ireland down nearly 4%, and AIB down just over 3%.
Pharma and medtech firm Uniphar was also down 3.7% but the company was also before the High Court defending itself in an action taken by pharmacy brokerage Thera. Kingspan also saw shares drop 2.8%.
In previous tariff announcements by the US president, products such as pharmaceuticals, medical technology as well as semiconductors were all exempted with Mr Trump saying they would be subject to their own tariff rates in due course.
It is not clear from Mr Trump's latest social media post as to whether this threatened 50% tariff would apply to these imports - all of which are very significant industries in Ireland and make up most of the country's exports to the US.
The 50% tariff is also higher than the 39% tariff on the EU that Mr Trump first proposed on April 2. The sweeping tariffs he announced on the day led to turmoil in US markets and bonds.
Mr Trump eventually backed down from his wide-ranging tariff regime, instead announcing that a 10% across-the-board tariff would apply to all imports into the US for 90 days. This 90-day pause was due to expire on July 8.
European shares
Shares tanked across Europe as a result of Mr Trump's latest threat which halted investors' expectations that the bulk of tariffs he announced in early April would be negotiated away.
Europe's broad Stoxx 600 index was last down 1.5%, with auto and luxury stocks both falling well over 3%. Germany's exporter-heavy DAX .GDAXI fell 2.3%.
U.S. S&P 500 futures also fell around 1.5% as investors also worried that the tariffs would hurt US and global growth.
Europe's luxury industry, which produces handbags, shoes, fashion items and champagne among other prized goods and is highly exposed to the US market, fell following the announcement.
Luxury conglomerate LVMH as well as Hermes saw their shares fall by around 3% and 4% respectively, in line with sector peers including Kering, Prada and Burberry.
The sector's largest groups sell roughly a quarter of their products to US consumers, while exposure among smaller brands varies, from 14% at outerwear company Moncler to 46% at sandals-maker Birkenstock.
The White House has been in negotiations with numerous countries over trade issues, and has agreed deals with Britain, and China.
Additional reporting Reuters
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