US stocks fall as Trump ramps up tariff threats
A file photo showing a woman walks down Wall Street in New York City, US, on April 8, 2025 (Photo: REUTERS/Kylie Cooper)
NEW YORK: European and US stock markets retreated Friday (Jul 11) as US President Donald Trump ramped up his trade offensive, threatening a 35 per cent levy on Canada.
Trump dampened earlier optimism by firing off more than 20 letters to governments outlining new tariffs if agreements are not reached by Aug 1.
Bitcoin, meanwhile, pushed on with its climb, reaching an all-time high above US$118,000.
The dollar was higher against its main rivals, and oil prices gained.
Wall Street's three main indices fell, with both the S&P 500 and Nasdaq retreating from records.
But the pullback was relatively modest, implying that many investors are taking a wait-and-see approach to Trump's latest tariff broadsides.
"We have yet to see new substantial tariffs actually be enforced," said Adam Sarhan of 50 Park Investments, describing investors as sceptical that the biggest levies will actually be enacted.
A note from Oxford Economics characterised Trump's moves as "more tariff theatrics", while allowing that the levy on Canada produced "jitters".
In Europe, where investors were awaiting news of Trump's new tariff level targeting the European Union, the Paris stock market dropped 0.9 per cent and Frankfurt 0.8 per cent.
"The fallout hasn't been more pronounced because the market still continues to view all of this as a point of negotiating leverage," said analyst Patrick O'Hare of Briefing.com.
Trump dialled up his trade war rhetoric Thursday, warning that Canada faced a 35 per cent tax, while other countries would be handed blanket tariffs of up to 20 per cent, from the current 10 per cent.
That came after he outlined plans to impose 50 per cent tariffs on copper imports, while threatening 200per cent levies on pharmaceuticals, and hit Brazil with a new 50 per cent charge.
The moves are the latest by the White House in a campaign it says is aimed at ending decades of the United States being "ripped off".
Trump's initial bombshell tariffs announcement in April sent markets into turmoil until he paused them for three months, and the latest measures have had less impact.
London's FTSE 100 and the pound retreated after data showed the UK economy unexpectedly shrank in May - its second consecutive monthly decline.
That followed a mixed session in Asia, where Hong Kong rose, Tokyo fell and Shanghai flattened by the close.
