*

U.S. steel and aluminium tariffs kick in, EU retaliates

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Puma blames weak sales outlook on soft U.S. and Chinese

demand

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Porsche warns it may hike car prices

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Tariff flip-flops causing 'paralysis', Franklin Templeton

says

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JP Morgan sees 40% chance of U.S. recession this year

LONDON, March 12 (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.

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.

European shares were largely resilient on Wednesday as

investors cheered news that Ukraine had accepted a U.S. proposal

for a 30-day ceasefire with Russia.

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%, to their lowest since August.

Tariffs are already driving prices for aluminium users in

the United States to record highs.

U.S. 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 Brenntag warned that

2025 will be another challenging year, shaped by economic and

political uncertainty and subdued economic growth globally.

CEO Christian Kohlpaintner said the company was relatively

insulated from import duties because it sources ingredients and

sells its products locally.

But what he called the "confusing, inscrutable" situation

makes it hard to run a business. Germany's chemicals association

VCI said on Wednesday it did not expect any recovery this year.

"The big risk is that companies stop spending and equally

the consumer also stalls purchases," said Justin Onuekwusi,

chief investment officer at investment firm St. James's Place.