LONDON (Reuters) -Makers of goods from sportswear to luxury cars and chemicals painted a gloomy picture on Wednesday of consumer and industrial health, adding to concerns about the damage from U.S. President Donald Trump's trade wars and hitting share prices again.
Increased tariffs on all U.S. steel and aluminium imports took effect on Wednesday, as Trump steps up his campaign to reorder global trade in favour of the United States. Europe swiftly retaliated.
Trump's plans for tariffs - and their back-and-forth implementation since he took office in January - have upended industries from cars to energy and unnerved businesses and investors. Worries that rising costs will reignite inflation, and that souring consumer sentiment could herald a U.S. recession have caused stock markets to plunge.
"Nearly everyone in the economy is struggling to comprehend wild swings in Washington policies, and their implications for everyday decisions," said Stephen Dover, chief market strategist at asset manager Franklin Templeton.
The constant flip-flopping over tariffs is paralysing industries from healthcare and retailing to agriculture, mining, energy, he said. Automakers, for example, are unable to plan while there is a threat of 25% tariffs on components made in Canada or Mexico.
"No reasonable auto executive can make such investments if the expected returns can be wiped out at the stroke of a pen," Dover said.
Germany's Porsche said on Wednesday it was assessing how it could pass on to consumers the cost of possible tariffs - expected to be 25% for U.S. imports from Europe - without pressuring its margins. That implies prices could be hiked to offset any drop in unit sales.
Even without higher tariffs, lower sales, high costs and trade concerns would hurt 2025 earnings, the luxury carmaker warned. Its shares were down 4.5%.
"For now, we are hoping there are solutions that will lead to a sensible tariff regime between regions," Porsche CFO Jochen Breckner said on a press call after its annual results.
Two major South Korean steelmakers said they were considering options including possible investment in operations in the United States as the metals tariffs came into force.
'CONFUSING, INSCRUTABLE'
J.P. Morgan's chief economist Bruce Kasman said he saw a 40% chance of a U.S. recession this year, which would rise to 50% if Trump follows through on threats to impose reciprocal tariffs from April. He also warned of lasting damage to the United States as an investment destination if the administration undermines trust in governance.