Summary
Here’s a quick overview of what happened today:
Markets around the world continued to reel from Donald Trump’s tariffs. The US stock market had a second day of steep declines, with all three indexes down over 5% for the day. The tech-heavy Nasdaq Composite entered a bear market, the first time a major index fund has done so since 2022. Meanwhile, the FTSE 100 saw its biggest daily drop since the pandemic.
US Federal Reserve chair Jerome Powell issued a rare warning that the tariffs could lead to both higher unemployment and higher inflation. “We face a highly uncertain outlook,” Powell remarked.
Ignoring Powell’s words of caution, Trump instead said on social media that Powell should cut interest rates. “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS,” Trump said.
Carmakers continued to offer deals to customers in light of the new 25% tariffs placed on cars and auto parts. Stallantis and Hyundai became the latest manufacturers to say they’ll offer discounts to US customers in the coming months, as fear of higher car prices take over.
Nintendo announced that the release of its Switch 2 will be delayed amid Trump’s new tariffs, an early sign of the supply chain issues the new levies will have on products.
Nasdaq closes in a bear market
The Nasdaq Composite closed in a bear market as trading ended Thursday afternoon, meaning the tech-heavy index was over 20% below its most recent peak, which was on December 16.
The last time one of the three major indexes closed in a bear market was in June 2022, when inflation hit 9%.
Nasdaq fell over 5% today, similar to the S&P 500 and the Dow. An analysis from Dow Jones Market Data estimates that the last two days have seen $6.4tn wiped off of the US stock market.
Major tech stocks have been some of the hardest hit by the turmoil on Wall Street, including Apple and Nvidia, which both saw drops of over 7% today.
Updated
In a rare critique of Donald Trump, Republican senator Ted Cruz said that the new tariffs present “enormous risks” to the US economy and will make Republicans vulnerable in the 2026 midterm elections.
Contradicting what Trump has said about the tariffs, Cruz said the tariffs “would destroy jobs here at home and do real damage to the US economy if we had tariffs everywhere,” Cruz said on his podcast released Friday.
But Cruz said that the tariffs would be a “home run” if Trump lowers existing trade barriers with the new tariffs, before removing them.
Cruz said that he was considering the proposal offered by a bipartisan group of senators that would require congressional approval for new tariffs. Democrats and independents need at least four Republican votes to pass the bill, along with getting it passed in the Republican-controlled House, making it unlikely that Congress will intervene on any tariffs.
The last few days have caused what appears to be the start of a reckoning on Wall Street as investors grapple with what a tariff-ladened future could hold for the US economy.
A new report from Bloomberg suggests that Wall Street firms are considering revising down their revenue projections after Trump’s tariffs announcement, which could lead to job cuts at the major banks. Sources from UBS Group told Bloomberg that some senior investment bankers have been asked to start thinking of employee layoffs.
Meanwhile, multiple companies are reportedly delaying their IPOs in the midst of the stock market tumbling.
Klarna, StubHub and Chime were all planning their stock market debuts in the coming weeks but have quietly decided to postpone their debuts amid the turmoil on Wall Street.
“There’s no way on God’s green earth I would recommend any fintech company go public right now, particularly the ones on deck,” investor Steve McLaughlin told the Wall Street Journal.
Dow drops 2,000 points
The Dow has dropped over 2,000 points now, its biggest drop since June 2020. The index is down nearly 5% for the day, after dropping 1,679 points on Thursday.
The S&P 500 and Nasdaq Composite are also still looking at declines of nearly 6%. Nasdaq is set to close in bear market territory, meaning it has fallen 20% below its recent peak.
Updated
Carmakers Stellantis and Hyundai announced today they will try to keep prices low for customers amid consumer fears that Donald Trump’s tariffs will increase car prices.
Trump placed a 25% tariff on all cars and auto parts that started early Thursday. Many US car manufacturers rely on parts from foreign plants, especially in Mexico.
Stellantis, the producer of Jeep, Fiat and Ram, among others, said that it would offer customers pricing typically reserved for employees, the company said, following a similar discount program announced by Ford yesterday.
Meanwhile, Hyundai, based in South Korea, said that it would hold its prices steady until June 2.
“We know consumers are uncertain about the potential for rising prices and we want to provide them with some stability in the coming months,” Hyundai CEO Jose Munoz said in a statement.
Among the biggest losers so far in the massive Wall Street sell-offs are tech stocks, particularly Apple, which relies heavily on China in its supply chain.
Apple is nearly 6% down today, after falling 9% on Thursday – what amounted to over $300bn of its market value, according to the Financial Times. It was the company’s worst day since March 2020, at the beginning of the Covid-19 pandemic. The White House went out of its way to confirm that there aren’t any exceptions made for Apple in Trump’s plan.
Projections made by Rosenblatt Securities suggest that the tariffs of China, of which there will be a total of 54% after Trump’s new reciprocal tariffs against the country, could increase the cost of the cheapest iPhone 16 model by 43% – from $799 now to $1,142, depending on how much of the tariff Apple chooses to push onto customers.
The tariffs came despite moves from Apple CEO Tim Cook to try to cozy up to Trump. Cook congratulated Trump on his win in November and was in attendance at Trump inauguration. In February, Apple announced that it would invest over $500bn in US jobs over the next five years, what was largely seen as a play to get Trump to hold back on tariffs.
Updated
Berkshire Hathaway released a statement that essentially says Donald Trump posted a fake quote from Warren Buffet on social media today.
A video posted on X that Trump reposted on Truth Social said that Trump is crashing the stock market on purpose, supposedly to get the Federal Reserve to cut interest rates.
“This is why Warren Buffett just said Trump is making the best economic moves he’s seen in over 50 years,” the video says.
In a statement to CNBC, Berkshire Hathaway, Buffett’s company, said: “There are reports currently circulating on social media (including TikTok, Facebook and TikTok) regarding comments allegedly made by Warren E Buffett. All such reports are false”.
We’re likely going to see a lot of attempts from Trump and his administration to reframe the situation on Wall Street in the coming days. Keep in mind that in early March, when Trump was asked whether he could confirm that the country wasn’t heading into a recession because of his tariff policies, Trump said: “I hate to predict things like that”.
Updated
This is Lauren Aratani in New York taking over. It’s just after 1 pm here, which means trading will close for the week in about three hours.
Things are really not looking good for the major index funds. The Dow is now down over 1,700 points today, while the S&P 500 and the tech-heavy Nasdaq funds are down 5% so far today. Keep in mind this is after stocks dropped as much as 6% yesterday, and things appear to keep falling.
Comments from Federal Reserve chair Jerome Powell, who said a few hours ago that tariffs will likely mean high inflation, have appeared to push markets further into panic.
It was just months ago that Wall Street was growing on hopes that the Fed will continue to cut interest rates this year, something that seems entirely unlikely at this point.
The Press Association has produced this graphic showing the FTSE 100’s movements this year – including how tariffs have wiped out gains since the start of January:
Donald Trump’s global tariffs assault is set to raise prices and slow down economic growth, Federal Reserve chair Jerome Powell has warned, defying the US president’s demands for an immediate interest rate cut.
While the US economy remains robust, Powell cautioned that there is high uncertainty over its direction. “Downside risks have risen,” he told an event in Arlington, Virginia, on Friday.
The Fed chair stressed that the tariffs unveiled by Trump this week were markedly more extensive than expected – and warned the impact would likely be larger as a result.
Trump promised to bring down prices while campaigning to win back the White House last year, and erroneously claimed on Wednesday they were “way down”, despite inflation holding firm.
But prices are likely to rise as a result of his tariffs plan, according to Powell, echoing the predictions of many economists.
Only one stock in FTSE 100 saw a rise on Friday
The UK’s FTSE 100 index has plummeted in its worst day of trading since the start of the pandemic, ending a punishing week for global financial markets.
Trading has been hammered in the aftermath of Donald Trump unveiling his full range of import taxes on countries around the world. London’s top stock market index shed 419.75 points, or 4.95%, to close at 8,054.98.
It marks the biggest single-day decline since March 2020, when the index lost more than 600 points in one day. All but one stock on the FTSE 100 fell on Friday, with Rolls-Royce, banks and miners among those to suffer the sharpest losses, PA reported. JD Sports was the lone riser.
Analysts for AJ Bell estimated that about 4.9tn US dollars (£3.8tn) had been wiped off the value of the global stock market since the US president announced his tariffs on Wednesday evening.
“China’s retaliation to Trump’s latest round of tariffs means that both sides are not backing down. It caps off a horrible week for financial markets and dragged share prices even lower,” AJ Bell investment analyst Dan Coatsworth said.
“The escalation in tariffs is bad for US companies who buy goods from China, and vice versa, because their costs will go up. It’s also bad for the world in general as we now have a repeat of the heightened geopolitical tensions between the US and China which dominated Trump’s first term in office.
“The rapid pullback in stocks and shares over the past few days has put a dent in people’s investments, including those in the US who were meant to have benefited from Trump’s actions. Instead, his tactics have caused shock waves in every corner of the world.”
Updated
Speaking at a business journalists’ conference on Friday, Federal Reserve chair Jerome Powell said that “it’s not clear at this time what the appropriate path for monetary policy will be.”
Nevertheless, Powell did also say:
“Inflation’s going to be moving up and growth is going to be slowing…but…we’re going to need to wait and see how this plays out before we can start to make those adjustments.”
Nintendo has postponed the launch of pre-orders for Switch 2 in the United States, after the announcement of significant new tariffs by the Trump administration earlier this week.
Originally scheduled for 9 April, the pre-order date has now been delayed indefinitely, the company confirmed on Friday. The release date for the Switch 2 in the US remains set for 5 June.
In a statement provided to Polygon, Nintendo said:
Preorders for Nintendo Switch 2 in the US will not begin on 9 April 2025, in order to assess the potential impact of tariffs and evolving market conditions.
We will provide an update on timing at a later date. The official launch date of 5 June 2025, remains unchanged.
FTSE suffers biggest one-day drop since early in the pandemic
The FTSE was down almost 5% at close of play Friday, representing the biggest daily drop since early in the Covid pandemic.
The exchange was down by 4.95% at 4.30pm today, the biggest drop since 27 March 2020.
Updated
Fed's Powell: Larger-than-expected tariffs mean higher inflation, slower growth
President Donald Trump’s new tariffs are “larger than expected” and the economic fallout including higher inflation and slower growth likely will be as well, Federal Reserve chair Jerome Powell said on Friday in remarks that pointed to the potentially difficult set of decisions ahead for the central bank.
“We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” undermining both of the Fed’s mandates of 2% inflation and maximum employment, Powell said in prepared remarks for a business journalists’ conference.
Powell spoke as global markets continued a swoon that has wiped 10% off major US stock indexes since Trump announced a raft of new tariffs on Wednesday, Reuters reported. Powell did not address the selloff directly, but acknowledged that the same uncertainty engulfing investors and company executives was facing the Fed.
The Fed, he said, has time to wait for more data to decide how monetary policy should respond, but the central banks’ focus will be on ensuring that inflation expectations remain anchored, particularly if Trump’s import taxes touch off a more persistent jump in price pressures.
“While tariffs are highly likely to generate at least a temporary rise in inflation, it is also possible that the effects could be more persistent,” Powell said.
“Avoiding that outcome would depend on keeping longer-term inflation expectations well anchored, on the size of the effects, and on how long it takes for them to pass through fully to prices. Our obligation is to keep longer-term inflation expectations well anchored and to make certain that a one-time increase in the price level does not become an ongoing inflation problem,” he said.
President Donald Trump on Friday called on Federal Reserve Chairmen Jerome Powell to cut interest rates, saying it was the “perfect time” to do so.
“CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!,” Trump said on Truth Social.
Stock markets worldwide are careening even lower Friday after China matched president Donald Trump’s big raise in tariffs in an escalating trade war.
Not even a better-than-expected report on the US job market, which is usually the economic highlight of each month, was enough to stop the slide.
The S&P 500 was down 5% in morning trading, coming off its worst day since Covid wrecked the global economy in 2020. The Dow Jones Industrial Average was down 1,656 points, or 4.2%, as of 10:50am Eastern time, and the Nasdaq composite was 5.5% lower.
Some economists say the jobs numbers provide a rear-view mirror look at the economy and worry about damage going forward from his policies, including the sweeping “Liberation Day’’ import taxes he announced Wednesday.
Financial markets have been reeling in the face of his trade wars, AP reported.
“This could be the high-water mark as we go into spring,’’ said Diane Swonk, chief economist at the accounting giant KPMG.
Economic uncertainty remains high, she said, adding: “Do the tariffs hold? Does the trade war escalate? How disorderly do markets get? There’s a lot of things in play right now.'’
“The market needed today’s number,” said Seema Shah, Chief Global Strategist, Principal Asset Management.
“Everyone knows that economic weakness is coming, but at least we can be reassured that the labour market was robust coming into this policy-driven shock.'’
It’s just two days since Donald Trump launched his extraordinary tariff assault on the world in a bid to rebuild the US economy and roll back an era of globalization. But already shopkeepers are bracing for recession, and their customers spending less, as they prepare to increase prices.
“We’re going to have to put our prices up and people aren’t going to like it,” said Ian Anderson, store manager at Tea and Sympathy, a UK grocery store, restaurant and fish-and-chip shop stalwart in Manhattan’s West Village.
Business costs have already increased significant, he noted. But tariffs would add to the load. “We’ve survived so far because we sell base products – cakes, scones, hot cross buns, mince pies. If it was just imports, we’d struggle.”
Most retailers in the New York neighborhood agreed on one thing: the tariffs announced this week would contribute to business environment anxieties that have been mounting for years, from the 2008 economic crisis, to the initial wave of tariffs under Trump’s first administration, the Covid pandemic and the high inflation that followed.
But many also said it was too soon to tell if Trump’s tariffs would ultimately go into effect – or if they were just the opening salvo of his latest shock-and-awe style of dealmaking. A day earlier, the US treasury secretary, Scott Bessent, encouraged countries around the world to refrain from retaliating against the US.
The day so far
A quick recap of another day of heavy losses on the international markets.
Global stock markets continue to slide today, on deepening fears that a global trade war will hurt the world economy badly.
Stocks fell on Wall Street when trading resumed today, with the S&P 500 index currently down 2.8%.
That follows steep losses on Thursday, when the US market had its worst day since 2020.
The tech-focused Nasdaq index is down 3% today, and 20% off its record high – putting it in bear market territory.
The global selloff intensified today as Beijing hit back against the US by announcing retaliatory tariffs of 34% on US goods imported into China.
Donald Trump has claimed that China ‘panicked’, while investors fear that the trade war is deepening – increasing the risks of a recession.
The International Monetary Fund (IMF) has warned that Donald Trump’s implementation of swingeing tariffs poses a “significant risk” to the global economy,
In London, the FTSE 100 share index has tumbled hard today. It’s currently down 384 points, or -4.5%, at 8089 points – on track for its biggest one-day fall since the March 2020, early in the Covid-19 pandemic.
The FTSE is also on track for its biggest weekly drop since 2022.
European markets have also slumped.
Updated
Shares in the US bank sector are down almost 6%, reflecting fears that the trade war could trigger a recession.
It may also indicate investors are expecting faster interest rate cuts by the US Federal Reserve, to prop up growth.
S&P 500 BANKS SECTOR FALLS 5.9% TO LOWEST SINCE SEPTEMBER
— First Squawk (@FirstSquawk) April 4, 2025
The Russell 2000 index of small US company stocks has slumped 4.2% in early trading, to its lowest since December 2023.
The Russell 2000 Index entered bear market territory for the first time since 2022. Down over -24% from the peak. pic.twitter.com/LmrUve2JBh
— Steve Burns (@SJosephBurns) April 4, 2025
Here’s our news story on China’s retaliation:
Trump: China played it wrong
Shortly before Wall Street opened, Donald Trump claimed that China had ‘panicked’ by announcing new retaliatory tariffs on US imports.
The president posted on Truth Social:
CHINA PLAYED IT WRONG, THEY PANICKED - THE ONE THING THEY CANNOT AFFORD TO DO!
Twenty eight of the 30 stocks on the Dow Jones industrial average are down in early trading.
The top fallers are companies who would suffer badly from an economic slowdown triggered by the US trade war.
Caterpillar, the maker of construction equipment such as diggers and bulldozers, are the top faller on the Dow, shedding 6.7% of value.
They’re followed by aeroplane maker Boeing (-5.9%), Goldman Sachs (-5.6%) and JP Morgan (-5.5%).
Nasdaq in bear market territory
Tech stocks are sliding again, pulling the Nasdaq index down by 3% in early trading.
The Nasdaq is now down more than 20% from the record high set last December, meaning it is in ‘bear market’ territory.
Wall Street tumbles at the open after China retaliates
The New York stock market has opened, and stocks are sliding again.
Following the worst day since March 2020, shares are being hammered again after China retaliated against the US by announcing 34% tariffs on US goods earlier today.
The S&P 500 index, a broad measure of the US stock market, fell by 2.48% at the start of trading, down 133 points to 5,262.68.
The Dow Jones industrial average, which tracks 30 large US companies, has fallen by 982 points at the open, down 2.4%, to 39,563 points.
These losses mean the Dow is down 10% from its recent record high, putting it in ‘correction territory’.
Trump: my policies will never change
Donald Trump has declared that his policies will ‘never change’, a few hours after China retaliated with tariffs on US goods.
The US president posted on Truth Social:
TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE. THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!
However, Wall Street futures continue to indicate shares will tumble in 30 minute when trading resumes, with S&P 500 futures down 2.7%….
Donald Trump has just posted a video on his Truth Social network that argues the US president is deliberately crashing the stock market to bring down interest rates.
The short video, which you can see here on X, is made by a MAGA supporter who claims that “Trump is playing chess while everyone else is playing checkers”.
It argues that Trump’s goal is to push cash into Treasuries (US government debt), to encourage the Federal Reserve to cut interest rates and allow debt to be financed at a lower rate.
[Indeed, Treasury secretary Scott Bessent has indicated in the past the White House wants to keep bond yields low]
The video also claims that Warren Buffett has endorsed Trump’s moves – but I can’t find any evidence that this is true. Indeed, the legendary investor is a critic of tariffs, calling them an “act of war“ last month, pointing out:
“Over time, they are a tax on goods. I mean, the tooth fairy doesn’t pay ’em!”
Full story: US added 228,000 jobs in March
The US added 228,000 jobs in March, far more than expected, as the US economy shook off the blow from the Trump administration’s deep cuts to federal workers.
The figure was up from an adjusted 117,000 jobs added in February. Unemployment rose slightly to 4.2%.
Economists anticipated 140,000 jobs would be added in March 2025, a slight decrease from February and a continued decline from the monthly average of 167,000 jobs over the past 12 months. Payroll firm ADP reported 155,000 jobs were added in the private sector for March 2025.
Just in: the US economy added more jobs than expected last month.
Total nonfarm payroll employment rose by 228,000 in March, well ahead of forecasts for 135,000 new jobs last month.
🚨BREAKING: US March #NFP higher than expected!
— MacroMicro (@MacroMicroMe) April 4, 2025
📈Nonfarm Payrolls 228K (est. 137K, prev. 117K)
📈Private Nonfarm Payrolls 209K (est. 127K, prev. 116K)
📈Unemployment rate 4.2% (est. 4.1%, prev. 4.1%)
📉Average hourly earnings YoY 3.8% (est. 3.9%, prev.4.0 %)
📈Labor force… pic.twitter.com/6RF4WhDntm
The U.S. Bureau of Labor Statistics reports that there were job gains in health care, in social assistance, and in transportation and warehousing.
But federal government employment declined by 4,000 in March, following a loss of 11,000 jobs in February. (this does not count people on severance pay, though, so may not capture the impact of cuts driven by Elon Musk’s DOGE department).
World shares fall into correction territory
The sight of China striking back against the US in Donald Trump’s trade war has driven global stock markets into ‘correction territory’ today.
MSCI’s All Country World Index, which covers companies across the global economy, is down over 1% today, after Beijing announced 34% tariffs on US goods.
That means it is over 10% below its record high, Reuters reports, a fall generally classed as a ‘correction’.
There are some dramatic moves in the currency markets today.
The Australian dollar has dropped by 3.5% today against the US dollar, while the Mexican peso is down 2.5%.
Risk appetite has taken “another big hit” as China struck back with fresh tariffs of its own against the US today, reports Fawad Razaqzada, market analyst at City Index and FOREX.com.
Razaqzada explains:
The world’s second largest economy has just announced a sweeping 34% tariff on all US goods, effective 10 April, escalating trade tensions yet again. In response, stocks, crude oil, and Aussie dollar all plunged, while government bonds and haven currencies – Japanese yen and Swiss franc – soared, alongside a rebounding gold.
With all these market tumbling, one has to wonder where it will all end.
So far, risk appetite has been literally non-existent. But there is still lingering hope that there might be some deals that could be agreed on before the April 9 go-live date for US reciprocal tariffs. However, as we get closer to that date, it looks like the trade war is only intensifying with China – and soon to follow others – coming back with counter measures.
Downing Street has said Sir Keir Starmer will be engaging with international leaders over the weekend, following the eruption of the global trade war that Donald Trump began this week.
A Number 10 spokesman said.
“We’ll be engaging with international leaders over the weekend.
“The need for engagement with international leaders is clear. It is a changing, shifting global economic landscape.”
Updated
European markets heading for worst weekly loss since Covid-19 panic of March 2020
The wave of selling gripping European markets has wiped 5% off the value of the Stoxx 600 index (of Europe’s largest 600 companies) today.
That takes its weekly losses to over 7.6%, which would be the worst week since March 2020, when the Covid-19 pandemic triggered a market crash.
EUROPE'S STOXX 600 NOW DOWN 7.66% ON WEEK, SET FOR BIGGEST WEEKLY FALL SINCE MARCH 2020
— First Squawk (@FirstSquawk) April 4, 2025
Updated
Nearly every share on the FTSE 100 index is down today.
The only risers are United Utilities and National Grid, classic defensive stocks (on the ground that people will still want water and electricity in an economic downturn), consumer goods maker Unilever, and tobacco firm Imperial Brands.
The FTSE 100 remains deep, deep in the red, down 329 points or 3.9% at 8146 points, a three-month low.
Updated
"Another jolt of fear shoots through markets"
The markets are “rattled” today after China’s retaliation against the US escalated the tariff war, reports Susannah Streeter, head of money and markets at Hargreaves Lansdown:
“Another jolt of fear has shot through markets, as China’s threat of retaliation has materialised. The big concern as that this a sign of a sharp escalation of the tariff war, which will have major implications for the global economy. The stock shock has shown up in even sharper losses with European indices sinking deeper into the red. Brent crude has also dropped sharply as expectations of a big hit to global growth and energy demand ratchets up.
The UK may appear to have been dealt a better hand in this round of tariffs, but it’s so interlinked with global trade, it’s set to be slammed by the harsh winds blowing through the global economy.
These kinds of market moves can feel incredibly uncomfortable, but anyone who has lived through any market turmoil in the past knows how important it is to focus on your long-term investment horizons and ride out short-term storms.
The pound has weakened against the US dollar today, as panicky traders seek out safe-haven currencies such as the Japanese yen and the Swiss franc.
Sterling has lost almost a cent against the dollar to just over $1.30.
“The market is doing one thing: pricing in a global recession,” says George Saravelos, currency expert at Deutsche Bank Research.
Saravelos believes that unless President Trump reverses the tariffs, the only “circuit-breaker to this trade shock” would be fiscal policy (ie, government spending and taxation policies).
He writes:
In the United States , the administration needs to re-anchor the debate around a fiscal strategy that offsets the huge tax rise that is about to take place.
We noted yesterday that Treasury Secretary Bessent refused to do this following the trade announcements and this further hit market sentiment. Examples of re-anchoring the fiscal debate include providing paychecks to households who are hardest hit from the tariff shock and introducing retroactive cuts to taxes for this year in the reconciliation bill that is currently being formulated in Congress.
Either way, the Republican leadership needs to convey a much greater sense of urgency in moving the fiscal package along and offsetting the fiscal tightening. Waiting till the summer - as they are communicating - might be too late.
European markets are being slammed today on fears about the impact of the unfolding trade war, as this data from LSEG shows:
The oil price is cratering too, as China’s retaliation against the US rocks global markets.
Brent crude is now down 6.6% today at $65.50 per barrel, the lowest since August 2021.
Wall Street futures plunge
The New York stock market is expected to fall sharply when trading begins in under three hours.
The futures market shows that the S&P 500 index, and the tech-focused Nasdaq, are on track to fall 2.5%.
Futures for the Dow Jones industrial average are down 950 points, indicating a 2.4% tumble.
China’s new 34% tariff on US goods matches the increase in duties on Beijing which Donald Trump announced on Wednesday.
News of China’s retaliation against the new US tariffs is driving stocks lower across Europe.
The Stoxx 600 index of Europe’s largest six hundred companies has now slumped by 4.4% today.
Germany’s DAX is down 5%.
Updated
Market slump accelerates as China announces retaliatory tariffs
Financial markets are now plunging following news that China has retaliated against the US over the tariffs announced by Donald Trump on Wednesday night.
In London, the FTSE 100 has now shed 313 points, or 3.7%, since the start of trading to 8173 points. That would be its biggest one-day decline since March 2023.
As this chart shows, the selloff has intensified in the last few minutes:
The selloff intensified after China’s finance ministry said it will impose additional tariffs of 34% on all U.S. goods from April 10 as a countermeasure to sweeping tariffs imposed by the US.
China’s State Council Tariff Commission said in a statement:
“This practice of the US is not in line with international trade rules, seriously undermines China’s legitimate rights and interests, and is a typical unilateral bullying practice,”
Banks continue to lead the sell-off in London. Barclays are now down 10% today. with NatWest down 9.5%.
Rolls-Royce, the jet engine manufacturer and services, were briefly down 12%.
Fears of a global economic slowdown are hitting miners; Glencore are off 8.7%.
Updated
Marketwatch: JPMorgan now see 60% chance of US recession after tariff hikes
JPMorgan’s economics team has just raised their recession probability to 60% following the aggressive tariff stance announced by U.S. President Donald Trump, Marketwatch report.
They add:
In a note entitled, “there will be blood,” chief economist Bruce Kasman and his team said this year’s 22-percentage tariff increase amounts to the largest tax hike since 1968.
“The effect of this tax hike is likely to be magnified — through retaliation, a slide in U.S. business sentiment, and supply chain disruptions. The shock is likely to be only modestly dampened by the flexibility tariff hikes afford for further fiscal policy easing,” they say.
They aren’t make immediate changes to forecasts as the initial implementation — and possible negotation — take hold. “However, we view the full implementation of announced policies as a substantial macroeconomic shock not currently incorporated in our forecasts. We thus emphasize that these policies, if sustained, would likely push the U.S. and possibly global economy into recession this year,” they say.
Updated
An index of the largest 50 companies in Europe is now in correction territory, Reuters reports, down 10% from its record closing high.
Euro Stoxx 50 Falls 10% From March Peak, Set For Correction
— LiveSquawk (@LiveSquawk) April 4, 2025
Deutsche Bank has been crunching its forecast numbers, and predicts that US economic growth this year could be less than half as much as previously expected.
Market strategist Jim Reid told clients:
For the US, the movement is stagflationary, and our economists think these could reduce the 2025 GDP forecast (Q4/Q4) from 2.2% to around or under 1%, with core PCE up from 2.7% to around 4%.
So recession risks will likely rise materially if these tariffs are sustained.
And when it comes to the Fed, they think the latest moves make them more likely to cut, even though the direction of travel is highly stagflationary, with the bias now towards up to four cuts this year if this tariff policy holds.
[Core PCE is a measure of US inflation, closely watched by the Federal Reserve]
European markets on track for worst week since 2022
The pan-European Stoxx 600 index, which tracks the largest companies across Europe, is down 2.2% today.
That takes its losses this week to 5.7%, which would be the biggest weekly fall since early March 2022.
European sell-off deepens
Back in European markets, the rout continues.
The FTSE 100 index is now down 1.7% today, a loss of 145 points, to 8328 (still the lowest level since mid-January).
Banks are being battered, with Natwest, Barclays, HSBC and Lloyds Banking Group all down over 5%.
Germany’s DAX is now down 2% and France’s CAC has lost 1.6%.
The sell-off comes as more economists warn that a trade war will hurt growth.
Bank of America told clients this morning:
US tariff increases add to the downside risks for global growth: our economists highlight that the US tariff increases announced this week could lower global GDP growth by at least 50bps, with a potential 100-150bps drag to US GDP growth, a 100bps drag to China and a 40-60bps drag to Euro area GDP growth.
This comes against the backdrop of US growth that has already started to weaken recently on the back of softening consumer spending.
Oil lowest since December 2021
The oil price has now sunk to its lowest level in over three years, amid growing fears that Donald Trump’s trade war will hurt the world economy.
Brent crude, the international benchmark, has now fallen by 3.8% today, down to $67.48 per barrel.
That’s its lowest level since early December 2021, when the world economy was being battered by the Covid-19 pandemic.
Brent crude oil futures, if they close here or lower, it will be lowest close since 24th August 2021.#oil pic.twitter.com/bmBC3aIkL4
— Justin Waite (@SharePickers) April 4, 2025
Crude prices are being hit by concerns over global trade tensions and its impact on oil demand, reports Joseph Dahrieh, managing principal at brokerate Tickmill.
Traders will have noted the IMF’s warning that Donald Trump’s implementation of swingeing tariffs poses a “significant risk” to the global economy.
The Opec+ group’s decision to increase production next month is also adding to fears of an oil glut.
Dahrieh says:
This pullback reflects market uncertainty and could weigh on global crude prices in the near term, particularly if trade tensions hinder economic growth in key oil-consuming regions. The outlook suggests caution, with volatility likely to increase as markets digest the full implications of the tariffs. Longer-dated futures contracts also saw declines in prices, indicating expectations of long-term risks for crude prices.
Meanwhile, OPEC+’s decision to increase its oil output adds further bearish pressure. The organisation is aiming to supply up to 411,000 barrels per day in May, which is significantly higher than previously planned.
Updated
YouGov: Majority of US adults believe tariffs will hurt the average American
A majority of US adults believe tariffs will hurt the average American, a survey from YouGov has found.
YouGov polled 3631 adults in the US yesterday, and found that 57% said tariffs would hurt the average American, while 19% said they would help them, 4% thought they would have no effect and 20% said they were not sure.
The poll also found that 74% said it was either “very likely” or “somewhat likely” that other countries will raise tariffs in retaliation [which would likely hurt US exports].
There’s also a political split – 85% of Democrats reckon tariffs will be painful, while nearly 40% of Republicans think they will help the average American.
Scotland's US charm offensive for Tartan Week
Scottish political and business leaders are in New York and Washington on a charm offensive linked to the annual Tartan Week festival, hoping to use Scotland’s soft power to dilute Trump’s tariffs and promote a US-UK trade deal, our Scotland editor Severin Carrell reports.
Against the backdrop of the kilt-laden cultural jamboree, John Swinney, Scotland’s first minister, is in New York meeting US investors, hosting a reception with the Scottish Chambers of Commerce and co-hosting a financial services event with the lord mayor of London, Alastair King.
Anas Sarwar, the Scottish Labour leader, was in Washington DC yesterday where he met the UK’s ambassador Peter Mandelson, before heading too to New York. He posted cheery videos on LinkedIn and Instagram with the message: “Diplomacy, dialogue, cool heads and personal relationships are so important.”
Meanwhile the Scottish Chambers of Commerce has signed a “timely” MoU with the New York Chamber of Commerce to “create a bridge” between the two countries linked to Swinney’s trade mission.
Successive first ministers have long used New York’s Tartan Week to promote Scottish interests, and their own. Whisky, Scottish salmon, tourism and inward investment feature heavily.
Trump’s trade wars have given this annual event far greater saliency: the US buys nearly £1bn worth of Scottish whisky a year; Scottish salmon exports (often to Michelin-starred restaurants in New York) brought in £225m last year.
They quietly play on Trump’s significant business and family ties to Scotland – he owns two Scottish golf resorts and occasionally mentions his mother’s birthplace on the Isle of Lewis.
As Swinney put it in a press release this morning:
“It is our largest inward investor and second largest export market, so it is crucial we build on existing relationships to seize future opportunities.”
It remains to be seen how much that soft power can cut through. One senior Scottish industry figure reckons it is superficial, at best:
“The heritage stuff is something to lean into - it’s a link that other nations don’t have - but there is no sense it will help to extricate the UK. It will be a hard headed deal which does, not sentiment.”
Updated
The rout in Japanese stocks this week has pushed the Nikkei index to the brink of a full-blown bear market.
The Nikkei 225 index has closed down 2.75% today, which I calculate means it has fallen by 19.996% from its record closing high last July.
A 20% fall would be an official ‘bear market’.
Investors are piling into government bonds again today, pushing up prices and thus lowering yields (the rate of return on the debt).
The yield on US Treasury bills is dropping again today, with 10-year Treasury yields down 10 basis points at 3.95%.
UK government debt is strengthening too, which is lowering the yield on 10-year gilts by 10 basis points to 4.41%.
Falling bond yields are a sign that investors are expecting weaker growth and lower interest rates.
Lower borrowing costs would, on their own, reduce the pressure on chancellor Rachel Reeves to hit her fiscal targets. The problem, though, is that an economic slowdown would hurt tax receipts…
Updated
Wall Street future warn of more losses today
The futures market suggests there will be further losses when the New York market opens.
The S&P 500 and the Dow Jones industrial average are on track to drop 0.7%, while Nasdaq future are down 0.5%.
That would add to the hefty losses yesterday, when the S&P 500 slumped 4.8% in its worst session since June 2020, as investors gave their verdict to Donald Trump’s new tariffs.
Paul Donovan, chief economist at UBS Global Wealth Management, says:
Financial markets expected a significant tax increase from US President Trump. Yesterday’s reaction shows the tax increase was worse than anticipated.
US dollar weakness is telling. We often hear that when the US sneezes the global economy catches cold. This is not the US sneezing. This is the US cutting off its own arm. The self-inflicted economic cost naturally weakens the dollar.
The sell-off is gathering pace in London.
The FTSE 100 is now down another 99 points, or 1.17%, to 8375 points, still the lowest since mid-January.
Key event
Donald Trump’s son Eric dropped a clanking hint last night about the White House’s trade strategy.
He posted:
I wouldn’t want to be the last country that tries to negotiate a trade deal with @realDonaldTrump. The first to negotiate will win - the last will absolutely lose. I have seen this movie my entire life…
This attracted some criticism from X users, reminding Eric of his father’s multiple bankruptcies.
But there are signs that some companies are keen to negotiate, particulary in Asia which were hit with high new tariffs.
Indonesia, for example, has pledged to ease trade rules. President Prabowo has instructed his cabinet to eliminate regulations that hinder trade, especially those related to Non-Tariff Measures (NTMs), in an attempt to placate the US.
Bangladesh is looking to hold talks with the Trump administration in a bid to lowe the new 37% tariff on its goods, which could hurt its garment export industry badly.
Sk. Bashir Uddin, Bangladesh’s de-facto trade minister, told Bloomberg:
“We’re actively exploring opportunities to reduce the gaps.”
Bloomberg: Billionaires lost $208bn yesterday as stocks plunged
The world’s 500 richest people saw their combined wealth plunge by $208bn yesterday, according to Bloomberg calculations.
The drop is the fourth-largest one-day decline in the Bloomberg Billionaires Index’s 13-year history, and the largest since the height of the Covid-19 pandemic.
The bosses of some of the largest US tech firms saw billions wiped off their wealth.
Meta founder Mark Zuckerberg was the biggest loser in dollar terms, with the social media company’s 9% slide costing its chief executive officer $17.9bn, Bloomberg reports.
Jeff Bezos lost $15.9bn in personal wealth, as Amazon shares plunged 9% yesterday.
Elon Musk lost $11bn, taking his losses so far this year to $110bn.
More here: Billionaires Lose Combined $208 Billion in One Day From Trump Tariffs
Oil on track for worst week since October
The oil price is falling again too, putting crude on track for its worst week since last October.
Brent crude is down 1.85% this morning at $68.83 per barrel, the lowest in almost a month, following a 6.4% plunge on Thursday.
Oil is a bellwether of the global economy, so is facing pressure from Trump’s tariffs.
It is also weaker because yesterday the Organisation of the Petroleum Exporting Countries (OPEC) and its allies announced a larger-than-expected production increase.
So far this week, Brent is down 6.5%, which would be the biggest weekly drop since October 2024 (corrected).
Updated
European markets are falling again too.
Germany’s DAX dropped 0.75% at the start of trading, while France’s CAC has lost 0.9% and Spain’s IBEX is down 1.4%.
Bank shares are leading the faller in London again, on growing fears that the Trump trade war will hurt the global economy.
Standard Chartered, the Asia-Pacific focused lender, has fallen almost 4% in early trading.
They’re followed by Natwest (-3.6%) and Barclays (-3.5%).
Mining stock are falling as well, with copper producer Antofagasta down 3.4%, on expectations that new trade barriers will dent demand for commodities.
FTSE 100 hits lowest level since January as sell-off continues
The London stock market is open…. and shares are falling again.
The FTSE 100 index, which tracks blue-chip shares in London, has fallen by 59 points, or 0.7%, to 8415 points.
That’s its lowest level since 17 January, adding to Thursday’s 1.5% tumble (which was the biggest one-day fall since last August).
City investors are gloomy again, having watched Wall Street rack up its biggest losses in five years yesterday.
Derren Nathan, head of equity research Hargreaves Lansdown, says:
“Despite months of sabre-rattling by Donald Trump, markets appear to have been unprepared for the depth and breadth of tariffs announced by the White House.
The tech-heavy Nasdaq saw the worst of it, falling nearly 6%, but there were hefty drops amongst the banks, industrials and energy sectors. Traditional defensive havens offered some refuge with gains seen in consumer staples and utilities.
Updated
City traders raise bets on UK rate cuts this year
Traders in the City of London are ramping up their bets on UK interest rate cuts this year.
The money markets are now pricing in around 74 basis points of cuts by the Bank of England this year. That shows that three more quarter-point rate cuts are almost fully priced in.
A rate cut at the Bank’s next meeting in early May is now an 86% change, up from around 75% yesterday (and a roughly 50:50 chance last week).
Nissan halts US orders for two SUVs built in Mexico
Carmaker Nissan has decided to stop selling two Mexican-built Infiniti SUVs in the US market, following Donald Trump’s new 25% tariffs on car imports.
New orders for the QX50 and QX55 variants manufactured in Mexico will be paused, Nissan said today.
Nissan said:
“We are reviewing our production and supply chain operations to identify optimal solutions for efficiency and sustainability.”
The company also has inventory at its U.S. retailers that is unaffected by the new tariffs.
Updated
Treasury minister: We're disappointed with US tariffs, not very happy
The UK government is pushing back against Donald Trump’s claim overnight that Sir Keir Starmer is “very happy” with the new tariffs set on British exports to the US.
Exchequer secretary to the Treasury James Murray said this morning that the UK was “disappointed” with US tariffs. And while the UK was in a “better position” than other countries because it is on the lowest band of tariffs, it will keep all options on the table, he explained.
Murray told Times Radio:
“The Prime Minister set out his reaction yesterday when he met businesses.
“We’re disappointed at tariffs being imposed globally.”
Dollar 'taking it on the chin again'
The US dollar is continuing to fall against a basket of major currencies today, adding to Thursday’s slide.
The US dollar index is down 0.3% today, slipping against both the euro and the Japanese yen.
It’s also dropped 0.8% to a six-month low against the swiss franc.
America’s currency is weakening due to fears that a trade war could lead to a recession, and expectations that the US Federal Reserve could cut interest rates to support growth.
Stephen Innes, managing partner at SPI Asset Management, explains:
“The dollar’s taking it on the chin again as FX markets ramp up pricing for a deeper U.S. recession and a forced Fed pivot. The yen comfortably wears its safe-haven crown, catching a steady bid on every tick lower in US equities.
With U.S. exceptionalism losing its lustre fast and 10-year Treasury yields breaking below 4%, the euro is emerging as a major winner in the tariff sweepstakes. Europe still has stimulus on deck, while Washington is busy swinging the fiscal axe. That divergence is no longer just a macro idea — it’s the trade.”
Italy’s foreign minister Antonio Tajani has said the European Union should aim to have new US trade tariffs halved from 20% to 10%, in line with what has been imposed on the UK.
Tajani told Corriere della Sera newspaper.
“In the short run a possible objective would be to halve the announced tariffs.”
“We have to work on it, but (EU Trade) Commissioner (Maros) Sefcovic is the best person to do it.”
As we covered yesterday (here), the White House used a much-criticised formula to come up with its new tariffs rates, based on the size of a country’s trade deficit as a ratio of total trade with the US.
Indian shares have joined the global sell-off on Friday after having largely weathered the storm in the previous session since the duties on the country were lower than on its peers.
The Nifty 50 fell 1.17% as of 10:51 a.m. IST, while the BSE Sensex was down 0.97%. They dropped a relatively mild 0.4% on Thursday.
Chinese industry groups have sharply criticised the US tariffs as well as the closing of the de minimis loophole which had allowed low value goods to be imported tax-free. Associated Press reports:
“America’s action crudely destroyed the normal order of trade between the US and China, severely impacted cooperation between global industries, and greatly harmed the rights of consumers, including American citizens,” said a statement from the China Light Industry Association, which represents the interests of light manufacturing businesses.
The tax exemption, which applies to packages valued at $800 or less, has helped China-founded e-commerce companies like Shein and Temu to thrive while cutting into the US retail market.
“We call on the international community to jointly resist this trade bullying, and firmly safeguard an equal and mutually beneficial international trade system.”
The China National Textile and Apparel Council chimed in as well, with a statement Friday saying they “supported the Chinese government’s forceful measures” as the US has “damaged the resilience of the global textile industry’s supply chain.”
Updated
Here’s an update on the markets, courtesy of Reuters:
As the week draws to a close, there are few signs of easing investor nerves.
US stock futures pointed to further weakness, with Nasdaq futures falling 0.7% while S&P 500 futures lost 0.66%.
That came after S&P 500 companies lost a combined $2.4 trillion in stock market value overnight, their biggest one-day loss since the coronavirus pandemic hit global markets on March 16, 2020, while other Wall Street indexes similarly suffered sharp falls.
EUROSTOXX 50 futures also declined 0.53%, while FTSE futures were down 0.32% and DAX futures 0.52%.
Japan’s Nikkei tumbled 3.4% and was on course to lose nearly 10% for the week, its worst weekly performance since March 2020.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.5% in thin trade, with markets in China, Hong Kong and Taiwan closed for a holiday. The index was set to lose more than 2% for the week.
“If the current slate of tariffs hold, a Q2 or Q3 recession is very possible, as is a bear market,” said David Bahnsen, chief investment officer at The Bahnsen Group.
“The question is, does President Trump seek some sort of off-ramp for these policies if and when we see a bear market in the stock market. We believe Trump will then pivot to focus on the number of companies that are making significant investments in the US, but it’s unclear that would reverse market sentiment.”
What do businesses around the world say about Trump's tariffs?
Experts have warned that Donald Trump’s aggressive tariffs will add costs and delays to businesses around the world, potentially triggering a global recession. Guardian reporters asked eight businesses around the world for their reactions. Here’s a flavour:
Ireland
“The US market is important to us, but it’s not the be-all and end-all. We’ve invested a lot of time, effort, and money into the US market over the last six years, so it is unfortunate. There are no winners in this,” an Irish whiskey maker told Lisa O’Carroll.
China
“If you’re asking if I know what I’m going to be paying on my three containers arriving from China, I don’t. Neither do our customs brokers. We asked right after the announcement: ‘What’s our duty? So that we can start planning.’ And they’re like: ‘We have no idea,’” a fitness equipment distributor who manufactures on China told Amy Hawkins.
India
“The US is the most important market for India’s shrimp industry,” a shrimp farmer told Hannah Ellis-Petersen. “But now Indian exports will have tariffs of 26%, while other competing countries such as Ecuador will have 10%. This gives a huge advantage to Ecuador and means they will probably replace India as the largest supplier of shrimps to the US market.”
Italy
“We should see in the next 10 days how these new taxes, let’s call them that, will affect new orders and prices, which is the thing that worries us the most,” a Sardinian cheesemaker told Angela Giuffrida.
Read on below:
US vice-president JD Vance has said he thought the stock market response to Donald Trump’s “could be worse” and faulted critics for taking a short-term view.
US stock markets saw their worst day of trading since 2020 today as investors grappled with the implications of Trump’s sweeping tariffs.
“Look, one bad day in the stock market compared to what President Trump said earlier today – and I think he’s right about this – we’re going to have a booming stock market for a long time because we’re reinvesting in the United States of America,” Vance said in an interview with Newsmax on Thursday evening. “We’re feeling good.”
He also said critics needed to be less short-termist.
That’s fundamentally what this is about, the national security of manufacturing and making the things that we need, from steel to pharmaceuticals.
Tokyo’s Nikkei 225 has now lost 3.5%, while the broader Topix index has fallen 4.45%. It’s just after 1pm in Japan.
Trade tariffs imposed on tiny Australian territories that are either uninhabited or claim to have no trading relationship with the US appear to have been calculated based on erroneous trade data.
The data relates, at least in part, to shipments mislabelled as coming from remote Norfolk Island, or Heard Island and McDonald Islands, instead of their correct countries of origin, the Guardian can reveal.
Among the erroneously-labelled shipments over the past five years from the island territories are shipments of aquarium systems, Timberland boots, wine and parts for a recycling plant.
According to an analysis of US import data and shipping records, multiple shipments of goods were classified as having originated from Norfolk Island or Heard and McDonald islands when neither the company address, nor the port of departure for the shipment, nor the destination port were located in those territories.
In some cases involving Norfolk Island, which is 1,600km north-east of Sydney and has a population of 2,188, the confusion appears to have resulted from the fact that the company’s address or port of departure is Norfolk, UK, or the destination is Norfolk, Virginia in the US, or a company’s registered address in New Hampshire (NH) has been listed instead as Norfolk Island (NI).
Norfolk Island was this week hit with a 29% tariff on its goods – 19 percentage points higher than the rest of Australia – despite having no export relationship with the US.
Donald Trump’s cumulative tariff hikes amount to about 22%, which would be equivalent to the biggest US tax increase since 1968, according to a note from JPMorgan.
Reuters reports that the bank has raised its risk of global recession to 60%, up from 40% previously, and said the tariff impact could be “magnified by retaliation, supply chain disruptions, and a sentiment shock.”
The note cautions that “sustained restrictive trade policies and reduced immigration flows may impose lasting supply costs that will lower U.S. growth over the long run.”
JPMorgan added that these policy actions could evolve in the coming weeks, that “the US and global expansions stand on solid ground and should be able to withstand a modest-sized shock”.
Tariffs imposed by US a 'national crisis', Japanese PM says
Tariffs imposed on Japanese goods by US President Donald Trump are a “national crisis,” prime minister Shigeru Ishiba has said.
The levies of 24% on Japanese imports “can be called a national crisis and the government is doing its best with all parties,” Ishiba said in parliament.
His comments came as Japanese stock markets dived; as we reported earlier the Nikkei lost 1.8% after opening on Friday, adding to a drop of 2.77% a day earlier.
On Thursday, Japan’s trade minister, Yoji Muto, said the tariffs on Japanese exports were “extremely regrettable” while chief cabinet secretary Yoshimasa Hayashi told reporters the tariffs may contravene World Trade Organization rules and the pair’s trade treaty.
New Civil Liberties Alliance, a conservative legal group, has filed what it says is the first lawsuit seeking to block Donald Trump’s tariffs on Chinese imports, saying the US president overstepped his authority. Reuters reports:
The lawsuit, filed in federal court in Florida, alleges that Trump lacked the legal authority to impose the sweeping tariffs unveiled on Wednesday as well as duties authorized on February 1 under the International Emergency Economic Powers Act.
“By invoking emergency power to impose an across-the-board tariff on imports from China that the statute does not authorize, President Trump has misused that power, usurped Congress’s right to control tariffs, and upset the Constitution’s separation of powers,” NCLA senior litigation counsel Andrew Morris said in a statement.
White House representatives did not immediately respond to an email seeking comment.
NCLA filed the lawsuit on behalf of Simplified, a Florida-based retailer of home management products.
Trump on Wednesday announced that China would be hit with a 34% tariff, on top of the 20% he imposed earlier this year, bringing the total new levies to 54%.
The lawsuit asks a judge to block implementation and enforcement of the tariffs and undo Trump’s changes to the US tariff schedule.
The lawsuit says presidents can only impose tariffs with Congress’ permission and under complex trade statutes spelling out how and when they can be authorized.
The French president, Emmanuel Macron, called the tariffs introduced by the US president, Donald Trump, “brutal and unfounded”.
Trump unveiled a 10% minimum tariff on most goods imported to the US, with a higher 20% rate for the EU. Macron said European countries must suspend planned investment in the US after the announcement:
In the Pacific, Fiji is the hardest hit by Trump’s tariffs. It has been levied with a 32% tariff, Vanuatu at 22% and Nauru at 30%.
Fiji prime minister Sitiveni Rabuka said the move was akin to a “trade blockade” that his country could not win.
“We cannot fight a war, a trade war particularly. We don’t have anything to counter with. So we will have to weather the storm and roll [with] the punches,” he said, as reported by FBC.
The US is Fiji’s biggest goods export market, dominated by the country’s eponymous branded water, according to AAP. Roughly $253m worth of the bottled spring water headed across the Pacific in 2023.
“I’d be surprised if it means the end of Fiji Water exports, they’ve built a market and a brand that’s more resilient than that,” Westpac analyst Justin Smirk told AAP.
Other Pacific nations, including Papua New Guinea, Samoa, Tonga, Solomon Islands, Cook Islands, Kiribati and the Federated States of Micronesia, have been given a 10% tariff.
The kind of drops experienced by US stock markets on Thursday are “entirely without precedent”, Lawrence Summers, an economist and treasury secretary under Bill Clinton, has said. In a post on X, he wrote:
Today was the worst stock market experience in five years. Usually when you have a terrible stock market experience, it’s because a bank fails, a pandemic, a hurricane or because some other country does something.
We don’t have these kinds of stock market responses in response to policies that the President of the United States is proud of. That is something that is entirely without precedent. It is extremely dangerous.
In an earlier post he wrote:
If any administration of which I was a part had launched an economic policy so totally ungrounded in serious analysis or so dangerous and damaging, I would have resigned in protest.
Senior senators introduced new bipartisan legislation on Thursday seeking to claw back some of Congress’s power over tariffs after Donald Trump unveiled sweeping new import taxes and rattled the global economy with sweeping new import taxes.
The Trade Review Act of 2025, co-sponsored by Senator Chuck Grassley, a top Republican lawmaker from Iowa, a state heavily reliant on farm exports, and Senator Maria Cantwell, a Democrat from Washington, whose state shares a border with Canada, would require the president to notify Congress of new tariffs, and provide a justification for the action and an analysis on the potential impact on US businesses and consumers.
For the tariff to remain in effect, Congress would need to approve a joint resolution within 60 days. If Congress failed to give its consent within that timeframe, all new tariffs on imports would expire. The legislation would also allow Congress to terminate tariffs at any time through a resolution of disapproval.
The first signs of an internal US political backlash against Donald Trump’s declaration of a global trade war were starting to emerge on Thursday amid tanking stock markets worldwide and widespread international criticism of the move.
Hours after Trump unveiled a sweeping panoply of tariffs in an event he dubbed “liberation day”, four Republican senators openly defied him by voting for a Senate resolution from Democrats demanding that the 25% tariffs on Canadian products be reversed.
The resolution lacks the force of law but its support from Mitch McConnell and Rand Paul, both of Kentucky, Susan Collins of Maine, and Lisa Murkowski of Alaska, immediately signaled the deep misgivings among some Republicans over Trump’s tariff gambit, which has triggered a global sell-off.
Zooming in on US stock markets – all three major US funds closed down in their worst day since June 2020, during the Covid pandemic.
Here’s our latest full report from the US:
US stock markets tumbled on Thursday as investors parsed the sweeping change in global trading following Donald Trump’s announcement of a barrage of tariffs on the country’s trading partners.
All three major US stock markets closed down in their worst day since June 2020, during the Covid pandemic. The tech-heavy Nasdaq fell 6%, while the S&P 500 and the Dow dropped 4.8% and 3.9%, respectively. Apple and Nvidia, two of the US’s largest companies by market value, had lost a combined $470bn in value by midday.
The managing director of the International Monetary Fund, Kristolina Georgieva, has warned that Trump’s sweeping new tariffs “clearly represent a significant risk to the global outlook at a time of sluggish growth”.
In a brief statement issued this morning, Georgieva cautioned against retaliation to American trade aggression, even as the European Union and China threatened to respond in kind.
“It is important to avoid steps that could further harm the world economy. We appeal to the United States and its trading partners to work constructively to resolve trade tensions and reduce uncertainty,” she said.
Trump has said he is ready to negotiate and willing to dial back import taxes if countries can offer him something “phenomenal”.
Asia markets plunge further after US stocks mark worst day in five years
Asian markets have posted further losses after opening on Friday, hours after US markets closed the day with some of their worst losses in five years, with tech stocks particularly hard hit.
Tokyo’s Nikkei index was down 1.8% at 34,108.23, adding to a drop of 2.77% on Thursday. The broader Topix index was off 2.3%, having lost 3.08% the previous day.
Chip-related shares were some of the worst performers on Friday, with Advantest and Tokyo Electron down 7% and 4%, respectively.
Australia’s S&P/ASX 200 index fell as much as 2% on Friday, to an eight-month low.
On Thursday, Wall Street’s tech-heavy Nasdaq Composite plunged 6%, while the retreat in the S&P 500 was its biggest in a day since 2020.
In Europe, both the Paris and Frankfurt stock exchanges finished the day with losses of more than 3%.
Oil prices plummeted more than 6% on concerns an economic downturn sparked by Trump’s trade policies would hit demand. The price of gold hit another new record.
The dollar slumped by as much as 2.6 percent versus the euro, its biggest intraday plunge in a decade, and suffered sharp losses also against the yen and British pound.
On Friday, the US currency fetched 146.33 yen in early Asian trade, rebounding slightly from 145.99 yen in New York.
Opening summary
Global financial markets have been plunged into turmoil as Donald Trump’s escalating trade war knocked trillions of dollars off the value of the world’s biggest companies and heightened fears of a US recession.
Asian markets plunged further on Friday morning, with the Nikkei in Tokyo dropping 1.8% and Australia’s S&P/ASX 200 index falling as much as 2%, to an eight-month low.
About $2.5tn (£1.9tn) was wiped off Wall Street and share prices in other financial centres across the globe by day’s end on Thursday.
IMF chief Kristolina Georgieva warned that the tariffs represented a “significant risk” to the global economy and warned against retaliation, while world leaders from Brussels to Beijing rounded on Trump. China condemned “unilateral bullying” practices and the EU said it was drawing up countermeasures.
Trump himself insisted market turmoil was no issue – telling reporters “markets will boom”.
On Friday, economists will be anxiously awaiting the latest US jobs figures – due out at 8.30am eastern time. It may take months for the impacts of Trump’s tariff decision to work their way into the jobs figures. But outside of the government’s official figures there are already signs that the resilience of the US jobs market is being tested.
Here’s a round-up of the key moments so far:
The New York stock exchange had its worst day of trading since June 2020 – during the early months of the Covid-19 pandemic. The main indices saw their worst one-day falls in five years as Donald Trump claimed that “the markets are going to boom” in response to his sweeping tariffs.
The heaviest falls in share prices on Thursday were reserved for US companies with complex international supply chains stretching into the countries that Trump is targeting with billions of dollars in fresh border taxes. Apple, which makes most of its iPhones, tablets and other devices for the US market in China, was down 9.5% at close of trading, and there were steep declines for other large multinationals including Microsoft, Nvidia, Dell and HP.
Canada will retaliate against “unjustified, unwarranted” tariffs imposed by the United States with a 25% taxes on US vehicles, Mark Carney announced on Thursday. The US has placed 25% taxes on Canadian steel, aluminum and vehicles.
The UK business secretary, Jonathan Reynolds, told MPs that ministers were still pursuing an economic deal with the US as the priority but “we do reserve the right to take any action we deem necessary if a deal is not secured”.
The French president, Emmanuel Macron, said Trump’s decision to impose tariffs of 20% on EU goods was “brutal and unfounded”, while Germany’s outgoing chancellor, Olaf Scholz, called it “fundamentally wrong”. Spain’s prime minister, Pedro Sánchez, said the “protectionist” tariffs ran “contrary to the interests of millions of citizens on this side of the Atlantic and in the US”.
Mitch McConnell, the Kentucky Republican senator and former Senate majority leader, has criticized Donald Trump’s latest tariffs, saying that they are “bad policy and trade wars with our partners hurt working people most”. Trump told reporters aboard Air Force One that tariffs on imported semiconductor chips and pharmaceuticals will be coming “soon”.
The US dollar hit a six-month low, falling 2.2% on Thursday morning, amid a growing loss of confidence in a currency previously considered the safest in the world for most of the past century.
Tariffs will fall heavily on some of the world’s poorest countries, with nations in south-east Asia, including Myanmar, among the most affected. Cambodia, where about one in five of the population live below the poverty line, was the worst-hit country in the region with a tariff rate of 49%. Vietnam faces 46% tariffs and Myanmar, reeling from a devastating earthquake and years of civil war after a 2021 military coup, was hit with 44%.
The EU is thought to be preparing retaliatory tariffs on US consumer and industrial goods – likely to include emblematic products such as orange juice, blue jeans and Harley-Davidson motorbikes – to be announced in mid-April, in response to steel and aluminium tariffs previously announced by Trump.
