EU nightmare as Donald Trump’s global tariffs send stock markets tumbling | World | News

European stock markets plunged sharply on Friday, a significant setback for Brussels. US President Donald Trump’s sweeping new global tariffs triggered a fresh wave of investor panic. The Eurozone, already grappling with inflation pressures and geopolitical uncertainties, now faces the added burden of disrupted trade and heightened economic risks.

The Eurostoxx 50 index dropped 1.7%, marking its lowest point in nearly five weeks, dragged down by heavy losses in key sectors such as pharmaceuticals and manufacturing. France’s CAC 40 fell 1.8%, and Germany’s DAX dropped 1.7%, underlining the significant impact the new measures are having across Europe’s largest economies. London’s FTSE 100 was not spared, sliding 0.6% to 9082.7 amid a global sell-off.

This sharp dip in European markets comes despite the recent announcement of a new trade deal between the US and the EU, reached after President Trump’s meeting with European Commission President Ursula von der Leyen earlier this week.

The agreement was expected to ease tensions and boost transatlantic trade cooperation, but the imposition of fresh tariffs has undercut that optimism, leaving investors skeptical about the durability and scope of the new pact.

Switzerland, which is not an EU member and is home to some of the world’s largest pharmaceutical companies, bore a double blow.

The nation now faces a punishing 39% tariff on its exports to the US—a market that accounts for 60% of its pharmaceutical trade.

Swiss firms are therefore isolated in a tariff environment where neighboring European countries face lower levies on goods exported to the US, placing them at a significant disadvantage, reports the Telegraph.

Shares in pharmaceutical giants AstraZeneca and GlaxoSmithKline tumbled by 3.9% and 1.6% respectively on the FTSE 100, while Danish firm Novo Nordisk and French pharma group Sanofi also suffered losses.

AstraZeneca CEO Pascal Soriot expressed frustration at the latest tariffs just days after announcing a major $50 billion investment plan in the US.

He said: “This landmark investment reflects not only America’s importance but also our confidence in our innovative medicines to transform global health and power AstraZeneca’s ambition.”

Mr Soriot added that he now faces a fresh blow from the White House as the tariffs threaten to undermine that commitment.

The wider European market meltdown reflects growing fears that Mr Trump’s tariffs—set to hit 69 countries with rates between 10% and 50% from August 7—will severely disrupt global supply chains and increase costs for manufacturers and consumers alike.

European exporters are understood to fear tariffs will undermine their competitiveness in the crucial US market. Some sectors face steep new levies on steel, aluminium, and automotive parts.

The currency markets mirrored the turmoil, with the euro falling 0.3% against the pound and the pound itself dropping 0.5% against the US dollar. The Swiss franc also weakened by 0.4%, losing its safe-haven status amid the trade tensions.

Industry voices have called on the US to use its leverage more strategically. Stephen Ubl, CEO of pharmaceutical industry group PhRMA, said Mr Trump “should use the same tactics on health care as he did on NATO members,” pressing European nations to spend more on innovative medicines.

He blamed “middlemen” for high drug prices in the US rather than the manufacturers themselves, highlighting the complexity behind the administration’s demands.

The global fallout is equally pronounced. Asian markets reacted negatively overnight, with China’s Hang Seng down 1.1% and Japan’s Nikkei 225 off 0.7%. Taiwan, a major exporter to the US, faces some of the steepest tariffs, exacerbating concerns about the fragile trade environment in the Asia-Pacific region.

The new tariffs follow an earlier wave imposed on April 2, though this latest round covers a broader range of goods and countries.

Mexico secured a 90-day reprieve to negotiate terms, but most nations face significant new costs on exports to the US. China, already under separate tariff pressure, faces a looming deadline on August 12.

Market analysts warn that the tariffs risk pushing global inflation higher as manufacturers and retailers grapple with increased costs.

Derren Nathan, head of equity research at Hargreaves Lansdown, said: “Countries playing tariff poker with Donald Trump have had their bluff called with new US import tax rates announced for 92 nations shortly before the August 1 deadline came into play.”

He added: “The declines saw the FTSE 100 drop below the 9,100 level, having hit record highs in recent weeks, but this was to be expected after climbing 4% in July.”

Joshua Mahony, chief market analyst at Rostro trading group, summed up investor concerns: “Part of the problem for markets is the question of who will pay for these tariffs, with the best-case scenario being that foreign businesses bear the brunt through lower margins.

However, that is not entirely the case, with US consumers starting to feel the pinch through higher prices.” Major US companies such as General Motors, Ford, and Apple have already warned of billions in lost earnings as a direct consequence of the tariffs.

In Canada, which faces a steep 35% tariff, Prime Minister Mark Carney struck a defiant tone. He insisted that Canada is “making historic investments in border security to arrest drug traffickers” and emphasized, “Canadians will be our own best customer.”

His comments underscore the growing risk that trade conflicts could force major economies to decouple and focus inward.

The uncertainty around who will ultimately bear the tariff burden adds to market anxiety. Investors worry that prolonged trade tensions could slow economic growth, disrupt supply chains, and increase costs globally.

As Europe navigates this turbulent landscape, governments and companies alike face tough choices in adjusting supply chains, seeking alternative markets, and managing the fallout from what is shaping up to be a prolonged trade war.