The Parisian index yielded 3.96% at the start of the afternoon this Friday, a few minutes after China’s announcement to impose 34% customs duties on American products. Since the beginning of the year, the CAC has decreased 1.09%.

The star index of the Paris Stock Exchange, CAC 40, plunged this Friday and has been erasing all of its earnings since January 1st in the face of climbing trade tensions between the United States and China. Around 2:25 p.m., the CAC 40 tumbled 3.96%, yielding 300.72 points to establish itself at 7,298 26 points. He had been up with 1.09% withdrawn since January 1.

“Europe plans to announce retaliatory measures soon and China has already reacted with 34% increase in its customs duties on American imports, enough to maintain climbing,” commented Natixis analysts. The new customs duties announced by Donald Trump Wednesday evening are particularly punitive for China, which has been inflicted additional rights of 34%.

Fears of an American recession

However, already targeted by customs duties, the taxes on its products will increase at 54% in total. In response, Beijing has announced that it in turn impose additional customs duties of 34% on American products on April 10 “in addition to the rate of customs duties currently applicable,” said the Chinese finance ministry.

“The hope of concluding some agreements before April 9, the date of entry into force of the reciprocal customs duties of the United States, persists. However, as we get closer to this date, it seems that the trade war is only intensifying, China – and soon other countries – taking countermeasures”, explains Fawad Razaqzada, analyst of City Index. “For example, French President Emmanuel Macron Thursday that French companies are expected to suspend their investments in the United States, “said Jim Reid, an economist of Deutsche Bank in a note on Friday morning.

“The second part that is powering is the recession aspect in the United States and on a larger scale”. The market says it is that the trade war will end up having “harsh consequences on the consumer around the world”, explains to AFP Guillaume Chaloin, Director of Actions management of Delubac AM. “The fears of a recession mean less industry and less oil consumption”, leading industrial and oil values.

Saint-Gobain fell 8.64%, ArcelorMittal by 8.61%, Schneider Electric by 7.11%, Airbus by 5.70%and Thalès by 5.23%. Totalnergies abandoned 4.40%. Values ​​like Danone (+0.74%) and Air Liquide (+1.24%) progressed. They suffer much less “the consequences of the problems of customs duties”, according to Guillaume Chaloin. These are also the only two values ​​of the CAC 40 in the green.

(With AFP)