Update Equities: Trump imposes tariffs
The dominant theme in the stock markets this week was the anticipation and announcement of US tariffs on goods and services imported into the US.
US President Donald Trump announced new tariffs on Wednesday for global trading partners, including a general tariff of 10% on all imports. This tariff increase reaches the highest level in almost 100 years. Furthermore, some countries and economic regions with significant trade imbalances with the US were subjected to even higher tariffs. For instance, China was hit with a 34% additional tariff, raising the total burden from tariffs to over 50%. Tariffs of 20% were imposed on the EU.
With these tariffs, Trump aims to promote the economic independence of the US and usher in a "Golden Age." The tariffs are deemed necessary to combat the US national debt. Simultaneously, the US administration expects no negative impact on the domestic economy, despite contrary expectations from economists.
Immediately following the announcement of the new tariffs, US stock index futures plummeted. This trend continued on Thursday in Asian and European stock markets. Critics warn of an escalation and thus the end of free international trade. In particular, shares of export-oriented companies and companies with a higher US exposure were under significant selling pressure.
Against this backdrop, the upcoming earnings season, starting late next week with US banks, could be of particular interest. The uncertainty regarding US tariffs is likely to dissipate, shifting the focus to corporate outlooks, what the tariffs mean and how companies plan to absorb these effects.
On the corporate side, one of the most notable stocks in US trading was Tesla. Overshadowed by the already controversial political involvement of its CEO Elon Musk, the car manufacturer's sales figures have declined more than expected worldwide. In the first quarter, the US electric car manufacturer delivered 13% fewer vehicles than in the same period last year. The German industrial conglomerate Siemens, on the other hand, announced for the second time in a few months the acquisition of a US software company to strengthen its automation technology business. Siemens is acquiring Dotmatics, a Boston-based company specializing in software for drug research and development, for USD 5.1 billion.