London shares drop on Trump’s tariff threats
The blue-chip FTSE 100 closed 0.4% lower, while the domestically focused mid-cap index declined 0.9%, marking its sharpest one-day decline since late November
London shares dropped on Monday as U.S. President Donald Trump’s tariff threats against Britain and seven other European nations sent shockwaves through global markets, though a bright spot emerged as insurer Beazley soared to a record high on a sweetened takeover bid from Zurich Insurance.
The blue-chip FTSE 100 closed 0.4% lower. The domestically focused mid-cap index declined 0.9%, marking its sharpest one-day decline since late November.
Trump said on Saturday he would impose an additional 10% tariff on goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, Finland and Britain starting February 1. Those tariffs would jump to 25% by June 1 unless the U.S. was allowed to buy Greenland.
The announcement unsettled global markets, with volatility returning to trading floors.
Major EU states condemned the tariff threats as blackmail, and France proposed responding with a range of previously untested economic countermeasures.
British Prime Minister Keir Starmer, meanwhile, called for calm discussions to resolve the stand-off.
The tariff threats also cast a shadow over trade deals the U.S. struck with Britain in May and the EU in July. Both limited agreements have already drawn criticism for their lopsided nature, favouring Washington.
Losses rippled across London’s stock market, with automobiles and parts subindex slipping 1.8% lower.
Luxury retailers too bore the brunt, with Burberry and Watches of Switzerland Group leading the losses with declines of 2.8% and 2.3%, respectively.
However, the non-life insurance sector provided a bright spot, cushioning the FTSE 100 from broader investor nerves. Beazley surged 42.9% to a record high after Zurich Insurance Group offered 1,280 pence per share for the British speciality insurer.
Peers Hiscox and Lancashire also gained 9.1% and 4%, respectively.