THE Spanish stock market has continued spiralling today following Donald Trump’s tariffs revelations.
It comes after Wall Street and Asia saw the worst stock market openings since the coronavirus pandemic.
In Spain, the Ibex 35 lost a significant 5.01% in the closing stages of Friday’s session, falling a predicted 12,530 points.
If this decline is confirmed, it would be the worst drop since Monday, March 16, 2020, when it plummeted 7.88% following the declaration of a state of emergency due to Covid-19.
The chaos stems from Trump’s ‘Liberation Day’ speech at the White House on Wednesday, in which he announced trade tariffs on the entire world.
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The US president revealed a baseline 10% tax on all foreign imports, which are to be added to each country’s individual levy.
The EU, and by extension Spain, was branded among the ‘worst offenders’ for ‘ripping off’ America. The Bloc was informed of a 20% tariff on all its imports to the United States.
There is also a 25% tariff on any automobile imports into Trump’s America.
In Spain, the financial sector has been the hardest hit, reports La Informacion Economica.
Although investors are not directly impacted by the new tariffs, they are fearful of major Spanish banks becoming collateral damage.
They believe the chances of a recession have now increased and could see the European Central Bank adopt lower interest rates than forecast in a bid to mitigate the fallout. This would affect the net interest income of banks in Spain.
This sparked huge losses for banks on the stock exchange, with Banco Sabadell and BBVA dropping by 11.05% and 10.21% respectively.
