Markets across the globe have been plunged into chaos following Donald Trump’s surprise decision to escalate tariffs on America’s biggest trading partners – sending stocks tumbling and triggering warnings of a self-inflicted economic crisis.
The FTSE 100 was down 4.6% by mid-morning Monday, with £75 billion wiped from the index in what analysts are calling one of the worst days for markets since the Covid pandemic.
The panic has sparked fears of an “escalatory spiral” as China responded with retaliatory duties and safe-haven assets surged.
Goldman Sachs raised its recession forecast for the US to 45%, while investors fled equities pushing bond yields to new lows and commodities sharply down.
Midlands companies caught in the crossfire
Among the hardest hit were several FTSE 250-listed companies with strong West Midlands ties:
- Domino’s Pizza Group, which has significant operational presence in the Midlands, fell 4.2% as investor confidence in consumer discretionary stocks weakened amidst global uncertainty.
- Renold Plc, a global manufacturer of industrial chains and gears with key UK operations in the West Midlands, saw its shares slide 6.19%. Analysts point to concerns over disrupted supply chains and rising input costs from trade restrictions.
- Babcock International, which operates major defence and engineering services in the region, dropped 6.35%. The market is worried about the impact tariffs will have on defence procurement and logistics across its international projects.
These drops reflect a wider collapse in industrial, retail, and service-related equities – sectors that are highly exposed to global trade volatility.
“Economic nuclear winter”
Billionaire investor Bill Ackman didn’t mince words, warning of a “self-induced, economic nuclear winter” should Trump persist with his tariff-heavy agenda. Commerce Secretary Howard Lutnick was also accused of benefiting financially from the downturn, fuelling investor cynicism.
Oil prices dropped to their lowest levels since 2021, with West Texas Intermediate falling 3.6% and Brent Crude dropping 3.5%. Copper, seen as a global growth indicator, collapsed by 7%. Even Bitcoin felt the chill, falling 2.8%.
What Next?
Despite the market meltdown, US Treasury Secretary Scott Bessent downplayed the reaction, calling it “short-term” and insisting the administration would “hold the course”.
But for West Midlands businesses, already grappling with post-Brexit pressures, inflation and workforce shortages, the uncertainty could not come at a worse time.
With the FTSE 100 and global indices bleeding red, companies and investors alike are bracing for a prolonged period of volatility.
Midlands businesses, particularly those with international exposure, will be watching carefully for signs of economic policy softening – or escalation.
