European stock markets fell sharply on Friday, hitting five-week lows, after US President Donald Trump announced sweeping new tariffs on global trading partners, including a 39% levy on Switzerland.
The Eurostoxx index dropped 1.6%, marking its lowest level since late June, as investor sentiment was further shaken by Trump’s call for major pharmaceutical companies to cut prices for American consumers. The FTSE 100 also declined, falling 0.6%.
Switzerland bore the brunt of the market reaction. The country now faces steep US tariffs while also housing some of the world’s largest pharmaceutical firms, making it particularly vulnerable. Unlike its EU neighbours, Swiss manufacturers will be subject to significantly higher US import taxes, potentially putting them at a competitive disadvantage.
More than £16 billion was wiped off the value of Europe’s leading pharmaceutical companies. In London, AstraZeneca shares slid 3.9%, while GlaxoSmithKline fell 1.6%. In Copenhagen, Novo Nordisk, maker of the weight-loss drug Ozempic, was down 4.4%, and Sanofi slipped 0.3% in Paris.
Trump’s trade offensive also includes a 35% tariff on Canadian goods and new levies on 69 other countries, ranging from 10% — the rate applied to UK exports under the existing UK-US trade agreement — up to 41% for goods from Syria. The new measures are set to take effect next Friday, marking a dramatic escalation in trade tensions.
The Short List of Trade War ‘Winners’
Few nations can truly be called winners in the escalating trade war. Most face newly imposed US tariffs on exports, while American consumers grapple with higher prices. However, in relative terms, a handful of countries have emerged with more favourable outcomes than expected.
India, initially thought to be at risk of severe penalties due to its continued purchases of Russian oil, appears to have avoided the worst. President Trump previously threatened secondary tariffs of up to 100% on countries trading with Russia, raising fears of a harsh economic blow to India.
While Trump took aim at the country this week, stating on Truth Social, “I don’t care what India does with Russia… We have done very little business with India, their Tariffs are too high,” he ultimately imposed a 25% tariff — significantly less than anticipated.
Taiwan and Vietnam also saw reductions. Taiwan’s tariff dropped from 32% to 20%, and Vietnamese goods now face a 20% tariff, down from the expected 46%.
“The new tariffs announced yesterday cover nearly 70 countries,” said Atakan Bakiskan, US economist at Berenberg Bank. “In some ways, this is not the worst-case scenario, as Trump had previously indicated that the universal 10% baseline rate could double.”
For countries spared the steepest hikes, it may not be victory — but it’s a reprieve.
