Stock Market's FTSE 100 Drops 0.55% Due to Negative Impact of Trump's Tariff Decisions on Public Mood
U.S. Tariffs Affect Indian Exports and U.K. Stocks Dip
U.S. tariffs on dozens of trading partners, including India, have taken a toll on several sectors, particularly in India, where the imposition of a 25% duty on goods has significantly affected economic growth and export sectors.
The U.S. tariffs, which range from 10% to 41%, have imposed higher costs for Indian exporters and disrupted trade dynamics, likely reducing India’s export volume to the U.S. and adversely impacting related jobs and economic activity.
The sectors most affected include textiles and apparel, where prices in the U.S. market face increases of around 38% for apparel and 40% for shoes in the short run, with long-term price elevations remaining at 17-19%. The government’s response involves encouraging Indian exporters to focus on building and promoting homegrown brands to mitigate tariff impacts and lobbying for support measures such as financial assistance and affordable credit to sustain export competitiveness.
Export sectors like marine food products are also seeking tailored policy schemes, since other countries like Ecuador face lower tariffs of about 15%, placing Indian exporters at a disadvantage. Economically, the tariffs are part of a broader U.S. tariff policy that raises the overall effective tariff rate to its highest since the 1930s, contributing to a real income loss average of approximately $2,100 per U.S. household and a 1.8% rise in price levels short-term.
Meanwhile, in the U.K., stocks are down in negative territory on Friday. The benchmark FTSE is down 50.05 points or 0.55% at 9,082.76. The U.K. manufacturing sector showed the softest contraction in output in nine months in July, with the S&P Global UK Manufacturing PMI rising to 48 in July from 47.7 in June, indicating the mildest decline in business conditions since January.
IAG is notably lower despite reporting consensus-beating operating profit growth for the second quarter. Other companies like Unilever, British American Tobacco, Haleon, Mondi, Endeavour Mining, United Utilities, and Airtel Africa are gaining between 0.7% and 2%. A report from Nationwide Building Society stated that U.K. house prices improved due to steadily improving housing affordability and a moderate fall in mortgage rates. House prices in the U.K. grew at a faster pace in July, increasing 2.4% yearly and 0.6% monthly.
In addition to the U.S., India, Brazil, and Canada have also faced steep tariffs from the U.S. AstraZeneca is down more than 3%, while Rentokil Initial and Weir Group are down 4.7% and 4.4%, respectively. Intertek Group's stock is down nearly 8% due to forex headwinds overshadowing the company’s solid first-half performance.
Sources:
- Economic Times
- The Hindu BusinessLine
- Reuters
- CNBC
- Bloomberg
- The technology sector might be concerned about the increasing tariffs, as they could lead to higher costs, disrupting global trade dynamics and potentially affecting the lifestyle choices of consumers.
- Investing in personal-finance education-and-self-development resources could be beneficial for individuals who wish to stay informed about the impact of tariffs on business, finance, general-news, and sports sectors.
- The entertainment industry is largely unaffected by tariffs, but it's essential to consider potential indirect consequences, such as reduced consumer purchasing power impacting television subscription rates or movie ticket sales.
- To maintain competitiveness in export sectors, Indian businesses could explore diversifying their markets and focusing on expanding within the finance sector, using affordable credit and financial assistance to lower overhead costs.
- In the wake of ongoing tariff disputes, the U.S. may face international criticism, particularly in the fields of industry, education, and self-development, where collaboration and global partnerships are crucial for growth and innovation.
