LONDON: 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 US President Donald Trump’s trade wars and hitting share prices again.

Increased tariffs on all US steel and aluminum imports took effect on Wednesday, as Trump steps up his campaign to reorder global trade in favor 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 US 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 paralyzing 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 percent 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 percent for US 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 percent. “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.

JP Morgan’s chief economist Bruce Kasman said he saw a 40 percent chance of a US recession this year, which would rise to 50 percent 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. Asked about a recession resulting from his trade policies, Trump said on Tuesday: “I don’t see it at all.” On Monday, he had declined to rule one out.

But earnings from Puma and Zara-owner Inditex underscored concerns about how uncertainties over trade are starting to hurt Main Street, curbing Americans’ spending on everything from detergent and clothing to travel. Shares in Puma lost almost a quarter of their value and hit a nine-year low after the German sportswear company forecast slower sales growth this year due to soft demand in the United States and China. It highlighted trade disputes and currency volatility as challenges.

Spain’s Inditex reported a slower start to its first-quarter starting February 1, raising questions about weakening consumer demand, particularly in the United States, its second-biggest market.

Its shares fell more than 8 percent, to their lowest since August. Tariffs are already driving prices for aluminum users in the United States to record highs. US inflation data for February is due later on Wednesday, though it may be too early to show much impact from the tariffs. 

German chemicals distributor BrenntagBNRGn.DE warned that 2025 will be another challenging year, shaped by economic and political uncertainty and subdued economic growth globally. — Reuters