Rolls-Royce share price falls as trade tensions rise
Rolls-Royce saw its stock price plummet by up to 10% today, becoming the latest casualty as growing concerns over a global trade dispute rattled the markets.
The Derby company’s shares hit a one-month low of 682p following news of escalating tariffs between the US and China.
As a key exporter of aircraft and marine engines, Rolls-Royce’s operations are connected to the global supply chain, which is vulnerable to such trade disruptions.
This made the company particularly susceptible to the news, as tensions between the US and China triggered concerns about the impact on international trade.
The turbulence was sparked by a series of tariff announcements, including a 34% retaliatory tariff from China and a 20% levy on European imports to the US, which President Trump justified by saying that the US had been “taken advantage of” for years.
Russ Mould, investment director at AJ Bell said: “With markets having suffered their worst week in five years, investors were hiding under their duvet on Friday hoping the pain would go away.”
The UK market also took a hit, with the FTSE 100 dropping by nearly 4%, and the FTSE 250 sinking over 3%.
European markets felt the pressure too, with Germany’s DAX falling 5% and France’s CAC 40 dropping 4%.
Mould continued: “Unfortunately, the relentless selling continued, with markets falling across Asia and Europe and futures prices implying the US will do the same when trading begins later on. Investors looking to buy on the dip were spoiled for choice given the sharp declines seen on the market this week. It’s now a question of when investors feel brave enough to go shopping. Today’s extended sell-off implies investors are still too nervous to take the plunge.”
The company is ramping up its production stateside to counter the effects of Donald Trump’s trade tariffs.
Reports at the time suggested Rolls-Royce was exploring how much of its production could be moved to the US to avoid the fallout from international trade conflicts.
