By Michele Maatouk
Date: Monday 03 Feb 2025
(Sharecast News) - London stocks were set to slide at the open on Monday after US President Donald Trump announced over the weekend that he will be imposing 25% tariffs on imports from Canada and Mexico, and a 10% additional tariff on China.
The FTSE 100 was called to open around 1.4% lower.
Kathleen Brooks, research director at XTB, said: "Canada has already imposed retaliatory tariffs on the US, China and Mexico have threated countermeasures against the US. Trump signalled that the EU will be next and, Brussels said that it would 'respond firmly' if Trump imposed tariffs on EU goods.
"The US tariffs had been well signalled ahead of this, what we didn't know before Sunday was the extent of retaliatory tariffs against the US. Canada has hit back strongly. Tariffs on $30bn of US goods will come into force on Tuesday, including health and cosmetic products, domestic appliances, pulp and paper, household items, plastics and tires.
"There is some speculation that Canada has deliberately targeted imports from Republican states who voted for Trump. In a few weeks we will have to see if they extend their retaliatory tariffs to Democratic states, when they are expected to impose tariffs on a further $125bn of US imports."
Brooks noted that European stocks are expected to open sharply lower, with the most severe declines expected for cyclical stocks and for the big exporters.
"Service-based economies could prove resilient, after Trump said that a deal can be worked out with UK PM Kier Starmer," she said.
"Not only is the UK a defensive-style index, especially the FTSE 100, but it is not facing an immediate threat of tariffs, even so the FTSE 100 is still pointing to a 0.8% decline at the start of this week. This does not mean that the UK economy will avoid impact from the tariffs, but it does mean that the UK economy could be more resilient than elsewhere, and the FTSE 100 could outperform its peers at the start of this week."
In corporate news, Continental Shelf-focused oil explorer Serica Energy announced that its license to operate the part-owned Rhum field has been extended by two months, which the company hopes will give it more time to secure a new long-term solution.
This extension is to allow the processing of the company's application "for a new long-term license to be completed following the transition in US Administrations", Serica said.
AstraZeneca's Imfinzi has been recommended for approval in the European Union as a monotherapy for the treatment of adults with limited-stage small cell lung cancer (LS-SCLC) whose disease has not progressed following platinum-based chemoradiation therapy.
The Committee for Medicinal Products for Human Use of the European Medicines Agency based its positive opinion on the results from the ADRIATIC Phase 3 trial which showed Imfinzi reduced the risk of death by 27% versus placebo. An estimated 57% of patients treated with the drug were alive at three years compared to 48% for placebo.
Bank of Georgia said that its Armenian banking subsidiary, Ameriabank, has secured a €105m loan from the European Investment Bank to support local micro, small, and medium-sized enterprises (MSMEs) and mid-cap companies.
The company said the financing would help to enhance business growth, competitiveness, and sustainability, with at least 20% allocated to green investments. A portion of the loan would be available in local currency to help MSMEs mitigate currency risks.
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