Financial Markets in Turmoil as US President Announces Tariffs on EU Products
The German Dax index closed the week on a low note, with a decline of 1.5 percent to 23,630 points at the Xetra close. The top gainers in the last trading hours were Vonovia, Bayer and Rheinmetall, while Brenntag, Deutsche Bank and Mercedes-Benz ended the day at the bottom of the list.
Market sentiment was heavily influenced by the surprise announcement from US President Donald Trump, who plans to impose a 50 percent tariff on all European Union products. This news sent the German index into the red zone, with uncertainty on the rise.
According to an initial calculation by the German Institute for Economic Affairs (IW), the tariffs could have severe economic consequences. If the 50 percent tariffs on EU products were to remain in place until the end of the Trump administration, the German economy would be expected to lose around 200 billion euros by the end of 2028. The average annual economic output would be 1.1 percent lower in the years 2025 to 2028 compared to a scenario without the tariffs.
Meanwhile, the European common currency, the euro, strengthened slightly, with one euro equivalent to 1.1337 US dollars and one dollar worth 0.8821 euros.
Oil prices also rose, with a barrel of the North Sea Brent crude oil costing 64.81 US dollars at around 5 pm German time, a 37-cent or 0.6 percent increase from the previous day’s close.