Ibex 35 Declines by 1.5% Amid Trump's Tariff Announcements

The Ibex 35 index experienced a decline of 1.5% by 14:00, following the announcement of tariffs by the United States on nearly 60 countries, including members of the European Union, China, Japan, South Korea, and Taiwan.

These tariffs have raised significant concerns among Spanish businesses, particularly in the wine industry, which fears a potential loss of EUR400 million in sales. The industrial sector is urging the government to respond decisively to mitigate the economic impact.

Meanwhile, other major European stock markets also faced steep declines during the mid-session. The Paris stock exchange fell by 2.26%, Frankfurt by 1.84%, Milan by 1.79%, and London by 1.28%.

Within this context, the Ibex 35 traded at 13,222.3 points, with Colonial showing resilience as it posted a gain of 4.13%. Other companies that fared well included Solaria (+3.92%), Cellnex (+3.22%), Grifols (+2.58%), and Indra (+2.51%). Conversely, the largest losses were seen in IAG (-3.40%), ArcelorMittal (-3.38%), Acerinox (-3.28%), Bankinter (-3.25%), and Banco Santander (-3.21%).

On Wednesday, the U.S. President announced what he termed 'Liberation Day,' introducing a 20% tariff on all products imported from the EU effective April 9. This figure is notably half of the 39% tariff that he claims the EU imposes on American goods.

Specifically targeting China, the U.S. will impose a 34% tariff in retaliation for policies that reportedly inflate the prices of American products by 67%. Additionally, starting May 2, the U.S. will revoke the 'de minimis' exemption that has allowed China to export goods valued under $800 (approximately EUR739.2) to the U.S. without incurring taxes.

Japan will face a 25% tariff, while South Korea and Taiwan will be subject to 25% and 32% tariffs, respectively. Other affected countries include India, which will see a 26% tariff, and Switzerland with a 31% tariff. In contrast, economies such as the United Kingdom, Australia, New Zealand, Brazil, and even Argentina will experience lower tariffs of 10%. These measures will take effect on April 5.

Analysts from Renta 4 noted that the tariffs are more aggressive than the market anticipated, resulting in significant declines across global stock markets and futures for U.S. indices, alongside a decrease in bond yields.

They also highlighted the absence of Mexico and Canada from the new tariffs, which have already faced a 25% levy from the U.S., albeit with exemptions, as well as the omission of Russia. The coming days may open avenues for negotiation until the tariffs are implemented on April 5 and the more substantial tariffs on April 9.

Despite President Trump's assertion that moving production back to the U.S. is the way to avoid tariffs, analysts believe he may remain open to negotiations to mitigate the adverse effects these tariffs could have on the U.S. economy in the short term, especially with the looming risk of recession and inflation.

In the medium term, these tariffs might bolster the U.S. manufacturing sector and yield annual tax revenues of approximately $700 billion. However, analysts emphasize that the critical question is how much economic strain Trump is willing to tolerate in the short run, particularly with mid-term elections approaching in November 2026.

Additionally, the price of Brent crude oil, a key benchmark for Europe, dropped to $71.97 a barrel, down 3.98%, while West Texas Intermediate fell 4.21% to $68.69.

In currency markets, the euro was trading at $1.1038, while the yield on 10-year bonds decreased to 3.279%, with a risk premium at 64.5 basis points.