Global stock markets experienced a partial recovery on Monday after sharp falls following US President Donald Trump’s announcement of trade tariffs on Canada and China. The FTSE 100 initially slumped, but partially recovered to close 1% down, the biggest one-day drop of 2025 so far. European stocks saw steeper declines, with the Cac 40 and Dax both finishing about 1.3% and 1.5% down, respectively.
Trump’s tariffs on Canada and China sparked fears of a global trade war, with Canada quickly retaliating with tariffs of its own. However, he agreed to delay similar measures on Mexico after last-minute discussions with the Mexican president. This news helped to alleviate investor concerns, resulting in Wall Street stocks rebounding shortly after.
Despite the temporary relief, there are still concerns about the potential impact of prolonged tariffs on the global economy. Asian markets suffered heavy falls overnight, with carmakers among the biggest casualties in Europe. Luxury car firm Aston Martin in the UK closed about 2.4% lower.
The pound also bounced back against the US dollar, up 0.6% as markets closed. Analysts warn that while current market movements suggest investors expect only temporary tariffs, if Trump does not reverse course, there could be more damaging consequences for stock markets ahead. The uncertainty surrounding trade tensions continues to weigh on global stock markets.
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