Trump tariff ‘surprise’ pushes FTSE 100 into the red

The FTSE 100 retreated on Tuesday, ending its three-day run of gains, after Donald Trump said he would impose trade tariffs on China, Mexico and Canada.

London’s blue-chip index fell 33.07 points, or 0.40%, to end the day at 8,258.61.

Markets had previously been optimistic after Mr Trump selected a hedge fund manager, Scott Bessent, as his Treasury secretary on Monday, but Tuesday’s tariff news pushed indices into the red.

The US President-elect singled out Mexico and Canada for tariffs in a social media post, at a 25% rate which was higher than previously expected.

The tariffs would see prices rise for ordinary American consumers on products ranging from petrol to cars and industrial products.

Mr Trump also threatened to impose an extra 10% tariff on all goods from China.

Dan Coatsworth, an analyst at investment firm AJ Bell, said market sentiment had “swung from one extreme to the other” after Monday’s hopes that Mr Bessent could water down Mr Trump’s plans.

The plan of 25% tariffs “took the market by surprise”, Mr Coatsworth said, and prompted a sell-off in the Mexican peso and Canadian dollar.

At the end of the day in Europe, Frankfurt’s Dax index fell 0.51%, while the Cac 40 in Paris fell 0.81%.

In New York a little while after markets had closed in Europe the S&P 500 had gained 0.33%, while the Dow Jones was 0.35% higher.

On currency markets the pound was trading 0.16% lower against the dollar at 1.2550 and was roughly level against the euro at 1.1974.

In company news, retailer Halfords signalled it may look to raise repair garage prices as it warned that Budget measures will send its wage bill soaring by around £23 million.

The firm said the cost implications of next April’s rise in national insurance contributions (NICs) and the minimum wage increase were “particularly acute” given its workforce of more than 12,000, while it also said the impact of Budget moves on consumers was “unclear”.

Halfords said only around £9 million of the extra cost burden was already included in its plans for 2025-26 and mitigated.

Half-year results out on Tuesday showed the car parts-to-bicycle chain’s pre-tax profits fell 23.3% to £17.8 million in the six months to September 27 as revenues dropped 0.1%.

Nonetheless, shares rose 13.9% after it said it would be able to mitigate headwinds in its Autocentres business.

Brent Crude Futures were up 0.55% to 73.410 US dollars at the close of trading.

The biggest risers on the FTSE 100 were Melrose Industries, up 41.8p to 569p, Intertek, up 178p to 4690p, Compass Group, up 43p to 2696p, Sage Group, up 20p to 1315p, and Imperial Brands, up 36p to 2600p.

The biggest fallers on the FTSE 100 were Beazley, down 28p to 756p, Intermediate Capital, down 74p to 2054p, Glencore, down 11.05p to 378.75p, Rentokil, down 10.2p to 402.7p, and Prudential, down 13.8p to 643p.