European stock markets faced a downturn on Thursday morning, with the Stoxx 600 index falling by 0.6% at 8:35 a.m. in London. The decline came as the euro weakened by 0.12% against the U.S. dollar at 7:13 a.m. London time. The drop in European stocks followed U.S. President Donald Trump's announcement of impending 25% tariffs on the European Union, sparking concerns across the markets.
"It'll be 25% generally speaking and that will be on cars and all other things." – Donald Trump
The fear of increased tariffs has cast a shadow over the European markets, with several key indices expected to open significantly lower. The U.K.'s FTSE 100 is anticipated to open 17 points lower at 8,700, Germany's DAX by 156 points at 22,632, France's CAC by 35 points at 8,108, and Italy's FTSE MIB by 364 points at 38,918. These projections highlight the widespread impact of potential trade barriers.
Despite the overall market slide, some companies managed to defy the trend. Aerospace and defense firm Rolls Royce saw its shares soar by more than 15% following the upgrade of its medium-term targets in its full-year results. On the contrary, British building materials supplier Howden Joinery plummeted by 6.7%, having narrowly missed full-year revenue expectations.
Global initial public offerings have shown a subdued trend of late. Nevertheless, David Schwimmer, CEO of the London Stock Exchange, suggested that London's pipeline was showing signs of improvement. He noted that although 20 U.K. companies had opted to list in New York over the past decade, the outcome was not entirely favorable.
"When you talk about companies that have gone to New York, it's not such a pretty picture. If you look over the last 10 years, 20 U.K. companies have gone to list in New York and raised over $100 million. Of that 20, four are trading up, something like nine have delisted, and the rest are trading down over 80%. So I think you have to be careful with the narrative of the grass is always greener," – David Schwimmer
In response to President Trump's tariff announcement, the European Commission reiterated its stance to protect free trade within legal boundaries.
"As previously stated, the EU will react firmly and immediately against unjustified barriers to free and fair trade, including when tariffs are used to challenge legal and non-discriminatory policies," – European Commission spokesperson
Amidst these tensions, some businesses remain unperturbed by the looming tariffs. The CEO of British multinational consumer healthcare company Haleon expressed confidence that any prospective U.S. tariffs would have minimal negative impact on their operations.
Additionally, Philippe Guillemot highlighted the resilience of his company due to its operational setup in the U.S.
"The good news for us is that we are American in America. 100% of what we sell on the onshore market, we make it in the U.S., with a fully integrated setup, from steelmaking from scrap to finishing of the pipe," – Philippe Guillemot
"So, obviously we are immune to the tariff that has been announced by the Trump administration and likely one of the benefiters of this decision," – Philippe Guillemot
While industrial leaders like Karen Gilchrist and Amanda Blanc emphasize long-term strategic planning as key to navigating these turbulent times, they continue to stress the importance of solid investment frameworks.
"These are really, really important milestones in terms of allowing us the opportunity to invest," – Karen Gilchrist
"It's a culmination of us following through on our promises," – Karen Gilchrist
"We are big investors in the U.K. It's important for us for the U.K. to do well," – Amanda Blanc
"What we need is the long-term thinking, what are the projects, what is the certainty around those projects. Then obviously the planning — get that bit done. And then we're ready to invest," – Amanda Blanc