(Reuters) -The FTSE 100 edged lower on Monday as market pessimism resurfaced due to fresh strains in global trade relations, following U.S. President Donald Trump’s pledge to double steel and aluminium import tariffs.
As of 0954 GMT, the blue-chip FTSE 100 was down 0.1%, while the domestically focussed FTSE 250 fell 0.03%.
Trump announced on late Friday his plans to increase tariffs on imported steel and aluminium to 50% from 25%, prompting the European Union to warn of potential retaliation.
U.S.-China negotiations also appeared strained after Trump accused Beijing of violating a bilateral tariff reduction agreement. China dismissed these claims as “groundless” on Monday, vowing to take forceful measures to protect its interests.
The industrial sub-index shed 0.5%.
Luxury goods makers Burberry Group and Watches of Switzerland Group dropped 1% and 2%, respectively.
On the flip side, the aerospace and defence sub-index gained 1% after the British government announced a 1.5 billion-pound ($2.0 billion) plan to build at least six new weapons and explosives factories.
The sub-index has surged 53.3% so far in 2025.
Countries across Europe and the UK are rapidly trying to boost their defence industries after Trump said the continent had to take more responsibility for its own security.
The energy sub-index was up 1.2% tracking higher oil prices as producer group OPEC+ stuck to the same output hike in July as it was for June, which came as a relief to those who expected a bigger increase.
Asset manager Aberdeen Group climbed 2% after Goldman Sachs upgraded the stock’s rating to ‘buy’ from ‘neutral’.
On the economic front, British manufacturing’s downturn was less severe than initially feared in May, though output, orders and jobs still declined, according to Monday’s S&P Global UK manufacturing PMI data.
Meanwhile, house prices in May were 3.5% higher than a year earlier, monthly data from mortgage lender Nationwide showed on Monday.
(Reporting by Ragini Mathur in Bengaluru; Editing by Shailesh Kuber)
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