Shares fall sharply following Donald Trump's renewed tariff threat

Shares tanked across Europe as a result of Mr Trump’s latest threat

In Dublin, shares in AIB, PTSB and Bank of Ireland fell 1.13%, 1.43% and 1.84% respectively.

Stock markets on both sides of the Atlantic fell sharply yesterday as US President Donald Trump resumed his threat of tariffs on EU goods.

It comes just days after share prices had recovered the losses inflicted after his April 2 'Day of Liberation' plan that was to impose tariffs on virtually every country in the world. It also shatters the expectation in some quarters that the overall threat of tariffs had subsided after Trump announced a 90-day stay for the EU and reached deals with the UK and China.

Major US indexes were down, and European shares fell. The dollar weakened while the price of gold, a safe haven for investors, rose. US Treasury yields fell on fears about tariffs' effect on growth.

In Dublin, the ISEQ index of Irish shares dropped 1.5% on the news before regaining some ground in the afternoon to end down 0.5%.

 The ISEQ had fallen to a 2025 low of just over 9,300 points on April 4, with the country's strong dependence on US multinationals and food exports seen as particularly vulnerable. However, the index saw strong gains since then, hitting a record 11,400 points on Wednesday.

European shares closed sharply lower yesterday. The pan-European STOXX 600 closed 0.9% lower, marking a weekly decline, its first in six. The index logged its biggest one-day fall since April 9. The STOXX 600 had recovered from its early April slump after trade deals calmed worries over trade tensions.

On Friday, automobiles and parts, expected to take the biggest hit from tariffs, led broader declines with a 3.1% fall. Economically sensitive banks shed 1.8%, while an index of luxury goods dropped 2.7% as they are highly exposed to the US market. In Dublin, shares in AIB, PTSB and Bank of Ireland fell 1.13%, 1.43% and 1.84% respectively.

Germany's DAX fell 1.5% after coming within spitting distance of a record high earlier in the day when data had shown that the country's economy grew significantly more in the first quarter than previously estimated. Indexes in France, Spain and Italy were down more than 1% each.

The benchmark 10-year European government bond yield dropped along with its US counterpart on raised concerns about slowing economic growth. It was a similar story on Wall Street. All three main US opened down on the Trump announcement, but pared early losses. However, each was still set to shed more than 2% for the week. Technology and consumer discretionary stocks were the biggest losers of the S&P 500's 11 subsectors. Utilities and consumer staples stocks gained.

Apple touched a two-week low and was down 2.8% after Trump warned the iPhone-maker it could face potential 25% tariffs on phones sold to US customers but not manufactured in the country.

Additional reporting Reuters

Additional reporting Reuters