The FTSE 100 finished in the red on Monday after a turbulent day for markets, after US President Donald Trump imposed trade tariffs on Canada and China, but delayed similar measures for Mexico. London’s blue-chip index dropped 90 points to finish the day at 8,583, or a 1% fall, marking its steepest one-day drop of 2025 so far. British and European markets were rocked earlier in the day following the imposition of tariffs over the weekend.

Shortly before the close of trading, Mr Trump announced that he would pause 25% tariffs on Mexico for a month after a last-ditch call with the country’s president, Claudia Sheinbaum. Canada is still in line for 25% tariffs and China 10% tariffs. AJ Bell head of financial analysis Danni Hewson said: “It was dubbed Manic Monday by market watchers as indices right around the world tumbled a bit like dominoes as investors woke up to the news that Donald Trump would push ahead with tariff plans.”.

She said it is “uncertain” whether a similar deal with Canada as the Mexico agreement can be worked out “as the rhetoric there has been rather more combative, with Trump renewing his calls for Canada to become the 51st state”. The pound bounced back from early falls against the US dollar, up about 0.6% at 1.239 dollars as markets were closing. It was 0.5% up against the euro at 1.206. In Europe, France’s Cac 40 closed 1.2% lower, and in Frankfurt the Dax was down 1.5%.

On Wall Street, the S&P 500 was 0.8% down and the Dow Jones had fallen 0.4% shortly after UK markets had closed, making partial recoveries after the Mexico announcement. In company news, Admiral Taverns, one of the UK’s largest pub companies, said it is well positioned to weather the impact of tax and wage increases amid a boost from acquisitions and investments. The pub firm, which runs around 1,400 sites, said sales so far this year have been stronger than expected, shrugging off pressures facing consumer finances.

Shares gained 0.9% on Monday. Meanwhile, tools and equipment hire company Speedy Hire warned that profits for the year will be weaker than previously expected, blaming an economic downturn affecting firms. The firm said it has been knocked by a slowdown in demand so far in 2025 and told shareholders on Monday that positive momentum towards the end of last year was “negatively impacted by the widely reported economic downturn”.

“This has resulted in a slower post-December shutdown recovery across the majority of our customer base,” the company added. The biggest risers on the FTSE 100 were CocaCola HBC, up 56p to 2866p, Vodafone, up 1.34p to 70.02p, Fresnillo, up 13.5p to 709.5p, BT, up 1.65p to 143.55p, and Admiral Group, up 24p to 2727p. The biggest fallers on the FTSE 100 were JD Sports, down 4.16p to 84.96p, Scottish Mortgage Investment Trust, down 44p to 1041.5p, Pershing Square, down 170p to 4112p, Croda, down 120p to 3224p, and Weir Group, down 72p to 2354p.