US President Donald Trump's new tariffs on Mexico, Canada, and China have sent shockwaves through global markets, triggering fears of renewed inflation and a trade war escalation. The automotive sector, heavily reliant on cross-border supply chains, is expected to be hit hardest, with investors bracing for price hikes and potential disruptions. Meanwhile, inflationary pressures are rising in Europe, prompting expectations of further interest rate cuts by the European Central Bank.
index had tumbled 0.84% by 8:30 a.m. in London as the Stoxx 600 basket of automotive stocks — one of the sectors expected to be most impacted by the new duties — fell 2.7%.
Autos in the North American supply chain will see the biggest near-term shock as U.S. President Donald Trump's tariffs on Mexico, Canada and China come into effect, Joe Davis, global chief economist at Vanguard, told CNBC's" "That's going to be more potentially disruptive in the near-term for growth, and inflation will be on the autos sector, particularly between Mexico and Canada. That's going to create the greatest volatility more than China."U.K. inflation could hit 4.1% in the second half of the year rather than the 3.1% consensus expectation, Andrew Wishart, senior U.K. economist at Berenberg, said in a note Tuesday.
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