Closing summary
Here’s a recap of the day’s developments:
Wall Street stocks tumbled on Thursday with all three major US stock indexes suffering steep losses. According to preliminary data, the S&P 500 lost 189.79 points, or 3.45%, to end at 5,267.11 points, while the Nasdaq Composite lost 737.66 points, or 4.31%, to 16,387.31. The Dow Jones industrial average fell 1,029.51 points, or 2.54%, to 39,578.94.
Donald Trump defended his tariff policies but warned there would be a “transition cost”. The US president said he would “love” to make a deal with China, and that he believed he and Chinese president Xi Jinping would “end up working out something that’s very good for both countries.”
Former US treasury secretary Janet Yellen said Trump’s tariffs are “the worst self-inflicted wound that I have ever seen an administration impose on a well-functioning economy.” She accused the US president of having “taken a wrecking ball” to the American economy.
Global stock markets rebounded after Trump’s announcement of the sudden pause, following the most volatile period in financial markets since the pandemic. Markets across Asia rose sharply earlier on Thursday, while European markets showed most indexes recording their biggest one-day gains since 2022.
The market moves were further supported by concessions from the EU. The European Commission president, Ursula von der Leyen, confirmed on Thursday that the EU will put its own tariff countermeasures against the US – which were due to kick in on 15 April – on hold for 90 days.
The European Union and the United Arab Emirates have agreed to launch free trade talks. The EU is the UAE’s second-largest trading partner, accounting for 8.3% of the Emirati total non-oil trade.
The overall US tariff rate on Chinese imports has risen to 145%. Trump’s announcement on Wednesday, where he said Chinese imports would be tariffed at 125% did not include the additional 20% tariff on China for its role in the production of fentanyl.
China said Trump’s trade war with Beijing “will end in failure” for Washington. Beijings own 84% retaliatory tariffs on US imports came into effect on Thursday, while its foreign ministry said it not interested in a fight “but will not fear if the United States continues its tariff threats.
Trump is facing accusations of market manipulation over a Truth Social post on Wednesday where he said it was a “great time to buy” just hours before he made a dramatic U-turn on his trade war that led to big rises in stock markets around the world.
The price of eggs continues to soar for American consumers, rising by almost 6% in March to an average cost of $6.23 for a dozen large eggs. That is more than double the price just 12 months earlier.
Wall Street closes after another day of steep losses
Wall Street stocks tumbled on Thursday on mounting worries over the economic impact of Donald Trump’s tariff policies.
All three major US stock indexes suffered steep losses, a day after surging on relief over Trump’s pause on most of the new tariffs announced last week.
According to preliminary data, the S&P 500 lost 189.79 points, or 3.45%, to end at 5,267.11 points
The Nasdaq Composite lost 737.66 points, or 4.31%, to 16,387.31.
The Dow Jones industrial average fell 1,029.51 points, or 2.54%, to 39,578.94.
Updated
On the basis of Napoleon’s dictum “never interrupt your enemy while they are making a mistake”, there was a large incentive for China to do precisely nothing as Donald Trump displayed his determination to lose friends and induce market panic.
Indeed, the Chinese advocates of passivity cited a social media meme attributed to President Xi Jinping: “Do nothing. Win.”
Initially it was tempting for China to sit back and watch the US’s former allies recoil at Trump’s disruptive war on globalisation and let them realise that, by comparison, China represented an oasis of stability, modernity and predictability.
China instead decided to be far from idle. It foresaw and prepped for this trade war, probably more so than for Trump’s first term, and decided that if the US president imposed on China the kind of tariffs he had suggested on the campaign trail, it would have to mount a counterattack.
Read the full story: Will Trump’s tariff chaos be China’s gain in global trade wars?
Keir Starmer has spoken to Japan’s prime minister, Shigeru Ishiba, today about US tariffs.
The pair “agreed that a trade war does not benefit anyone, and that now is the time for a cool, calm and pragmatic approach,” according to a Downing Street spokesperson.
Starmer and Ishiba also agreed on the “importance of like-minded partners such as the UK and Japan to work closely together to lower trade barriers.”
Updated
Gold prices have jumped to a record high on Thursday, with investors turning to gold as a safe haven amid a drop in the dollar and an escalating US-China trade war.
Spot gold climbed 2.6% to $3,160.82 an ounce, after hitting a record high of $3,171.49 earlier in the session.
US gold futures rose 3.2% to settle at $3,177.5.
Donald Trump’s climbdown on Wednesday from the most draconian aspects of his tariff regime has uncovered a damning picture of chaos at the heart of his presidency without necessarily alleviating their most painful effects.
The president’s landmark “liberation day” unveiling of tariffs in the White House Rose Garden on 2 April was supposed to be symbolic gateway to his promised “golden age of American greatness”; instead, it triggered a cascade of global market crashes that prompted warnings of a recession, or even a 1930s-style depression, while Trump brushed it all off as temporary “disruption”.
Time alone will tell how much damage has been inflicted on the credibility of Trump’s economic policy and indeed his entire administration by the ditching of nearly 80 years of US economic and free trading architecture, only to be followed by a sharp, if partial, U-turn.
EU and UAE to launch free trade talks
The European Union and the United Arab Emirates have agreed to launch free trade talks.
The talks will focus on trade in goods, services, investment and deepening cooperation in strategic sectors including renewable energy, green hydrogen and critical raw materials, the EU said.
The agreement to launch talks is aimed at deepening bilateral relations and promoting economic growth, the UAE said.
The EU is the UAE’s second-largest trading partner, accounting for 8.3% of the Emirati total non-oil trade.
Donald Trump’s cabinet meeting has ended after more than an hour, during which he returned to tariff negotiations repeatedly.
On the subject of the European Union, Trump said “every country is different” but that the EU would be treated as one bloc.
“We’re looking at it as one bloc,” he said.
They’ve been very tough, but they were very smart. They were ready to announce retaliation. And then they heard about what we did with respect to China and others, but China. And they said, you know, we’re going to hold back a little bit.
US treasury secretary Scott Bessent said he didn’t see “anything unusual” as stocks tumbled on Thursday.
Inflation numbers were good, oil down and the bond market “successful,” Bessent said.
Up two, down one is not a bad ratio, or up 10, down 5, and I think as we have talked about, as we go through the queue and settle with these countries, they’re gonna bring us their best offers.
A maverick economic policy announcement from a self-styled disruptor plunges the country’s currency into freefall and puts rocket boosters behind the cost of government debt, prompting warnings of an economic nuclear winter and forcing a pretty undignified U-turn.
If, on top of general concern, there has been a nagging sense of deja vu in Britain over the past 24 hours, then the ill-fated 49-day reign of Liz Truss as the UK prime minister may well be to blame.
“This is Donald Trump’s Liz Truss moment,” tweeted Ed Davey, the Liberal Democrat leader (alternatively known to followers of Elon Musk on X as that “snivelling cretin”).
For some, Trump’s gameshow host performance in the White House Rose Garden, as he unveiled the bumper tariffs on “liberation day”, had all the hallmarks of a Truss-style disaster in the making – and one on a rather grand scale.
Read the full story: Trump’s ‘Liz Truss moment’: when economic bravado meets market reality
Trump says he would 'love' to make a deal with China
Here’s more from Donald Trump at his cabinet meeting today, during which he warned that there will be a “transition cost” to his tariff policies.
“We’ll see,” Trump replied when asked what his next steps are for China. He added:
We would love to be able to work a deal. They’ve really taken advantage of our country for a long period of time.
Trump said he was “resetting the table” and that he had “great respect” for Chinese president Xi Jinping who has been “friend of mine for a long period of time”. Trump added:
I think that we’ll end up working out something that’s very good for both countries.
The price of eggs continues to soar for American consumers, rising by almost 6% in March even as overall inflation fell slightly.
Breaking a record high for the third consecutive month, the average cost of a dozen large eggs hit $6.23 in March – more than double the price just 12 months earlier, according to new figures released by the Bureau of Labor Statistics on Thursday.
This surpassed the previous record highs of $5.90 a dozen in February, and $4.95 in January.
The latest figures come just days after the country’s largest egg producer reported record sales and profits amid growing scrutiny over alleged price gouging.
Trump says US in 'very good shape' but warns of 'transition cost'
Donald Trump defended his tariff policies at a cabinet meeting on Thursday, while warning that there may be a “transition cost”.
“We’re very, very happy with the way the country’s running. We’re trying to get the world to treat us fairly,” Trump said at the start of the meeting.
We think we’re in very good shape. We think we’re doing very well. Again there will be a transition cost, transition problems, but in the end it’s going to be a beautiful thing.
Updated
Summary of the day so far
US stocks tumbled on Thursday, a day after surging on relief over Donald Trump’s pause on most of the new tariffs announced last week.
As of around noon ET, the S&P 500 index, the broad measure of the US stock market, lost 298.72 points, or 5.45%, to 5,158.18. The Dow Jones industrial average fell 1,872.86 points, or 4.61%, to 38,735.59. The tech-focused Nasdaq index lost 1,091.78 points, or 6.38%, to 16,033.20.
Here’s a recap of the day’s developments:
Global stock markets rebounded after Trump’s announcement of the sudden pause, following the most volatile period in financial markets since the pandemic. Markets across Asia rose sharply earlier on Thursday, while European markets showed most indexes recording their biggest one-day gains since 2022.
The market moves were further supported by concessions from the EU. The European Commission president, Ursula von der Leyen, confirmed on Thursday that the EU will put its own tariff countermeasures against the US – which were due to kick in on 15 April – on hold for 90 days.
The overall US tariff rate on Chinese imports has risen to 145%. Trump’s announcement on Wednesday, where he said Chinese imports would be tariffed at 125% did not include the additional 20% tariff on China for its role in the production of fentanyl.
China said Trump’s trade war with Beijing “will end in failure” for Washington. Beijings own 84% retaliatory tariffs on US imports came into effect on Thursday, while its foreign ministry said it not interested in a fight “but will not fear if the United States continues its tariff threats.
Trump is facing accusations of market manipulation over a Truth Social post on Wednesday where he said it was a “great time to buy” just hours before he made a dramatic U-turn on his trade war that led to big rises in stock markets around the world.
The price of eggs continues to soar for American consumers, rising by almost 6% in March to an average cost of $6.23 for a dozen large eggs. That is more than double the price just 12 months earlier.
Former US treasury secretary Janet Yellen said Trump’s tariffs are “the worst self-inflicted wound that I have ever seen an administration impose on a well-functioning economy.” She accused the US president of having “taken a wrecking ball” to the American economy.
Argentina’s largest workers’ unions kicked off a massive 24-hour strike on Thursday, bringing trains, planes and ports to a halt as they protested against sweeping austerity measures from libertarian president Javier Milei’s government.
Total US tariffs on China are at least 145%, including 20% fentanyl levy, Guardian understands
Earlier we reported on CNBC saying that the overall US tariff rate on Chinese imports has risen to 145%.
The Guardian understands that to be correct. The increase follows a new executive order from Donald Trump raising the “reciprocal” tariff to 125%, up from 84%.
Updated
Former US treasury secretary Janet Yellen: Trump's economic policies are 'worst self-inflicted wound' by any administration
Former US treasury secretary Janet Yellen has said that the recent rise in Treasury yields likely played a role in former president Donald Trump’s decision to pause planned tariffs.
In an interview with CNN International, Yellen, who is also a former Federal Reserve chair, criticized Trump’s economic approach, calling it the “worst self-inflicted wound” an administration has imposed on an otherwise well-functioning economy.
Yellen also expressed concern over the direction of US economic policy under Trump, warning that such measures have increased the likelihood of a recession.
Updated
Trump tariffs on China now 145%, White House tells CNBC
The overall US tariff rate on Chinese imports has risen to 145%, a White House official has confirmed to CNBC.
The increase follows a new executive order from Donald Trump raising tariffs to 125%, up from 84%.
An additional 20% tariff, tied to measures targeting fentanyl-related imports, brings the total to its current level.
The move marks another escalation in US trade policy toward China.
Updated
Argentina’s largest workers’ unions kicked off a massive 24-hour strike on Thursday, bringing trains, planes and ports to a halt as they protested against sweeping austerity measures from libertarian president Javier Milei’s government.
The capital, Buenos Aires, was quiet on Thursday morning, though public buses were running as usual. Banks and schools shuttered, and public hospitals and government agencies were running on skeleton staffing, Reuters reported.
On Wednesday, ahead of the strike, workers joined a weekly pensioners’ protest in front of Congress. Retirees have seen their pension funds slashed and their protests have ended in violence in recent weeks as sympathetic groups, such as soccer fans, have clashed with police.
“After this strike, they have to turn off the chainsaw,” said Rodolfo Aguiar, general secretary of the ATE Nacional union, referring to Milei’s analogy for slashing public spending.
“It’s over, there’s no more room for cuts,” Aguiar added.
As a reminder, there’s a list of the tariffs originally threatened by Donald Trump, before he dialed them back to 10% for 90 days, here:
Roubini: Recession is avoidable, says 'Dr Boom'
Ever the contrarian, Nouriel Roubini, the economist better known as Dr Doom, has dismissed prognostications of global recession as overblown.
Speaking at the Delphi Economic Forum in Greece hours after Trump pressed the pause button on his trade war, the renowned policy expert said he believed compromise would prevail and ultimately save the day.
He told an audience gathered in the mountain town for the tenth iteration of the forum:
“They call me Dr Doom but I’ve always been a contrarian. Wall Street has been predicting a recession, but I actually think it is avoidable. I might as well be Dr Boom.”
Roubini, who in 2006 had correctly warned of the recession that the credit and housing market bubble would unleash, said it was quite feasible that a US-EU trade deal could be pulled off in a matter of months or “even a month.”
He argued that the US and Europe will reach an compromise.
“With friends and allies you are gonna reach a deal.
“The euro can go up and down [by] 10 [or] 20 percent in a matter of months … you can live with 10 percent tariff, so with most of the world that is going to happen, that reduces the market tensions and reduces the risk of an US and global recession.”
But with China he forecast “a different story.” Without “a grand bargain” that could dissolve tensions the threat to US and global economic growth lingered, he said.
“China is worried that the US is out to destroy [it], not only trade wise but also economically and also militarily and therefore for the time being this game of chicken between the US and China is going to continue, the question is, who is going to blink, whether they can sit down and find a grand bargain.”
He continued:
“I fear that even if they sit down and try to negotiate … with China it’s a bigger mess and mostly likely, for now, we are escalating rather than de-escalating and that’s still a threat to US economic growth, to global economic growth and to the markets.”
Updated
The day so far
On the fourth day of another turbulent week, here’s where things stand today:
US stocks has slipped back in early trading today, a day after surging on relief that Donald Trump had postponed most of the new tariffs announced last week.
The main stock indices are in the red in New York, with the S&P 500 index currently down 3%, or 164 points lower, at 5,292 points.
But European markets are on track for one of their best sessions since 2020, as investors react to last night’s u-turn from Trump.
In London, the FTSE 100 is currently up 307 points, or 4%, at 7985 points, which could be its best day since November 2020.
White House National Economic Council Director Kevin Hassett has lifted the mood, telling CNBC that trade talks with some US counterparts are already well advanced, including deals that were close to done last week.
Yesterday’s tariff reprieve has been welcomed in South Korea, Taiwan, and Vietnam, where governments have said the pause will allow them “breathing room” and time to negotiate with the Trump administration.
There is also relief that the European Union has paused its new tariffs against the US for 90 days, to allow time for negotiations with Donald Trump.
But China has said Donald Trump’s trade war with Beijing “will end in failure” for Washington, hours after the US president announced he would increase his tariffs on the country’s imports to 125%.
China’s own 84% retaliatory tariffs on US imports came into effect today amid an escalating trade war between the world’s two biggest economies.
There have been calls for a clampdown on trading by members of Congress, amid claims of market manipulation by the Trump White House
Updated
Donald Trump has welcomed the drop in the CPI index last month, posting on Truth Social:
Just out: “INFLATION IS DOWN!!!”
UBS is cautioning that market volatility is likely to remain elevated in the weeks ahead.
Mark Haefele, chief investment officer at UBS Global Wealth Management, says:
“Despite Wednesday’s announcements to lower the reciprocal tariff rate for most countries to 10%, the escalation between the US and China could dramatically impact trade between the world’s two largest economies.
We currently estimate the overall US effective tariff rate at 27% (versus 9% prior to 2 April). Excluding trade with China, the effective tariff rate is 11%.”
The early drop in stock prices in New York today suggests the euphoria that drove Wednesday’s dramatic rebound was “was short-lived”, reports Fawad Razaqzada, market analyst at City Index and FOREX.com.
Razaqzada explains:
The renewed weakness came as investors wondered what the true impact of Trump’s tariff shuffle might be and figured it may be prudent to hit the pause button while the trade war between the US and China continues.
That being said, dip-buyers will be lurking for opportunities after the big reversal yesterday, and we could still seem some decent bounce trades here and there while the market finds a new equilibrium price.
The trend is still technically bearish given the lower highs, and for that reason, the bulls should not get complacent and still trade from level to level until more evidence of a market bottom emerges. Thus, the Nasdaq 100 forecast is yet to turn decidedly bullish.
Wall Street opens lower
As feared, Wall Street has opened in the red after yesterday’s historical surge.
The S&P 500 index, the broad measure of the US stock market, has dropped by 2.1% at the start of trading.
That comes a day after its third-best day since the second world war, when the S&P 500 surged by over 9% after Donald Trump paused most new tariffs for 90 days.
The Dow Jones industrial average dropped 1.6%, or 675 points, at the open to 39,932 points.
The tech-focused Nasdaq index is down 2.7%, as traders ponder how much damage the new US and China tariffs on each others exports will hurt the technology sector.
Need another sign we’re living financial history?
— Luke Kawa (@LJKawa) April 10, 2025
Three of the biggest 32 daily ranges in the S&P 500 have come in the first three sessions of this week.https://t.co/hUW8RqfzAS pic.twitter.com/ezm5qNb5oE
Those lingering concerns over the impact of a trade war are countering optimism after the EU has paused its new tariffs on the US for 90 days, and White House National Economic Council Director Kevin Hassett said that trade talks with some US counterparts are already well advanced.
Speaking of the Bank of England … its deputy governor Sarah Breeden has warned that US tariffs are likely to lower UK growth.
Breeden told an MNI Livestreamed Connect event today.
“Expenditure switching by US consumers away from UK goods, combined with weaker global demand due to potential counter tariffs and supply chain disruptions would be expected to weigh on UK activity.
The impact on inflation, however, is not that clear cut.”
Back in the UK, the Bank of England has postponed an auction of long-dated British government debt, due to the market turmoil this week.
Reuters has the details:
The Bank of England said on Thursday that it was postponing an auction of 750 million pounds of long-dated government bonds due on April 14 as a result of recent financial market turmoil.
The BoE said the sale - part of the BoE’s efforts to reduce the huge stockpile of bonds it built up under QE - would be delayed until the following quarter and that it would hold an auction of short-dated government bonds on April 14 instead.
These auctions are part of the BoE’s “quantitative tightening” programme, where it sells the assets it bought through its recent stimulus programmes.
Wall Street to drop despite talk of trade deals
After a euphoric session yesterday, after Donald Trump pressed pause on his trade war with most of the world, Wall Street is heading for losses today.
The futures market shows the Dow Jones Industrial Average could drop by 1.6%, while the broader S&P 500 index is called down 2.1%.
Technology stocks are set for losses, with the Nasdaq futures down 2.5%.
Investors will have noted the comments from White House National Economic Council Director Kevin Hassett today, who said that trade talks with some US counterparts are already well advanced.
There will also be relief that the EU has paused its new tariffs on the US for 90 days, to create a window for negotiations.
But there are also concerns that tensions between Washington DC and Beijing have escalated, with the US hiking China’s tariffs to 125%.
China insisted today that Donald Trump’s trade war with Beijing “will end in failure” for Washington, as its 84% retaliatory tariffs on US imports came into effect today.
Here’s a chart showing how US inflation droppped last month:
US inflation lower than expected in boost for Trump
The trade tensions stirred up by Donald Trump have not, yet, pushed US inflation higher.
The latest consumer prices index data is just out, and it shows that price dipped by 0.1% in March.
On an annual basis, inflation dropped to 2.4% in March from 2.8% in the year to February, a boost to Donald Trump, as it bolsters his argument that inflation is easing on his watch.
Energy prices fell by 2.4% in March, thanks to a drop in gasoline prices. Food prices were up 0.4%.
The Bureau of Labor Statistics explains:
Indexes that increased over the month include personal care, medical care, education, apparel, and new vehicles. The indexes for airline fares, motor vehicle insurance, used cars and trucks, and recreation were among the major indexes that decreased in March.
On an annual basis, the energy index decreased 3.3% for the 12 months ending March. The food index increased 3.0% over the last year.
Updated
Hassett: We have some deals that are "really, really well advanced"
White House National Economic Council Director Kevin Hassett has insisted that trade deal talks with some countries are well advanced.
Speaking to CNBC, Hassett said that “so many deals are teed up”.
He denied that the bond market forced the White House to delay its new tariffs (excluding China) by 90 days.
He insists that officials discussed whether to annnounce a general pause, or a few deals that are “just about finalised”.
Hassett says:
“In the end everyone decided as a team, from Peter Navarro to whoever else you think is on the other side, agreed to do it this way.
The fact that the bond market was telling us “hey it’s probably time to move” certainly would have contributed at least a little bit to that thinking.
Hassett then explains that the White House has a process to outline the changes it is asking for to improve trade relations. This process will allow negotations to proceed in a very orderly fashion, he says, which will be “very reassuring” for markets.
Hassett insists:
Basically we’ve got a few deals that we’ve been working on ahead of this, that are really, really well advanced.
He also suggests that talks with countries around the world could be wrapped up in 80 days, in a nod to the classic Jules Verne novel.
Updated
Despite the euro’s rally today, economists are expecting the European Central Bank to cut interest rates at their next meeting later this month, to help the eurozone economy.
Ulrike Kastens, senior economist at asset management firm DWS, explains why there is more scope for an April rate cut:
How things can change in just a few weeks. At its last meeting in March, the ECB did not even rule out a pause in rate cuts. But now it is being overtaken by the new trade reality. The significant increase in tariffs on European exports to the US and the associated uncertainty have significantly increased the downside risks to the economy in 2025, which the central bank is likely to counter with a further 25bp cut in the deposit rate to 2.50%.
Although no new growth and inflation projections will be presented at the April meeting, a key question at the press conference is likely to revolve around the impact of tariff policy on inflation. In our view, the disinflationary effects have recently been reinforced by the fall in oil prices, but also by an increase in the supply of goods actually destined for the US. Given the high level of uncertainty, we do not expect any change in the ECB’s communication: data-dependency and decisions taken meeting by meeting. Further rate cuts cannot be ruled out in the short term, although the room for manoeuvre is limited, not least by the German fiscal package.
Over in Brussels, EU spokesperson Olof Gill has told reporters that “We want to negotiate, we want to talk.”
Gill explained:
We are not going to offer any greater detail at this point about what we are not saying to the Americans beyond what we have already said.
We want to negotiate, we want to talk.
We appreciate that you have brought this pause on so called reciprocal tariffs, and we, in turn, are now pausing our proposed countermeasures in order that we have the maximum space to consult with our member states, consult with our industry and negotiate with the US.
We’re ready to make deals.
Gill has also been quizzed about why the EU has paused its countermeasures, even though they were imposed in response to the first round of US tariffs on steel and aluminium, which actually remain in place, Jakub Krupa reports.
Summary: A strong morning's trading in Europe
After a morning of enthusiastic trading, Europe’s main stock markets are all firmly higher as the clocks chime 12pm in London.
Equities have rallied strongly on the main bourses, on relief that Donald Trump paused his trade war on countries, excluding China, last night, and that Europe has responded with its own pause today.
Here’s the situation:
FTSE 100: Up 352 points or +4.6% at 8031 points.
Germany’s DAX: up 1,140 points or +5.8% at 20,812 points
France’s CAC: up 394 points or +5.75% at 7,260 points
If trading stopped now, it would be the FTSE 100’s best day since 2020.
That follows Wednesday’s blistering rally on Wall Street, as Charalampos Pissouros, senior market analyst at XM, explains:
Wall Street skyrocketed yesterday, with the S&P 500 recording its biggest winning day since the Great Recession and the tech-heavy Nasdaq rallying more than 12%, the most since 2001.
The astounding rebound was the result of US President Trump’s decision to declare an immediate 90-day tariff pause on dozens of nations, though he kept the 10% baseline duty on nearly all imports to the US. The pause came less than a day after the duties kicked in, raising hopes that the US government could be willing to sit at the negotiating table with many of its trading partners to find common ground.
That said, China had a different treatment. Following the announcement by the world’s second largest economy that they will raise levies on US products to 84% and proceed with restrictions on nearly 20 US firms, the US President raised the 104% tariff on Chinese imports that came into effect yesterday to 125%.
The further escalation in the US-Sino trade conflict suggests that the worst may not be behind us, even after the 90-day pause announcement reduced the odds for a US recession. After all, no one can say with certainty that Trump will not change his mind in the following days.
Updated
Europe’s decision to pause its retaliatory tariffs on the US is helping the euro to rally today.
The single currency is up more than a cent against the US dollar to $1.108, up 1.1% today.
EU to pause countermeasures for 90 days
Newsflash: The European Union has paused its new tariffs against the US for 90 days, to allow time for negotiations with Donald Trump.
This follows Trump’s decision last night to cut the tariffs on countries who hadn’t retaliated against his first wave of trade levies, to 10%.
Ursula von der Leyen, president of the European Commission, has posted:
We took note of the announcement by President Trump.
We want to give negotiations a chance.
While finalising the adoption of the EU countermeasures that saw strong support from our Member States, we will put them on hold for 90 days.
If negotiations are not satisfactory, our countermeasures will kick in. Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.
We took note of the announcement by President Trump.
— Ursula von der Leyen (@vonderleyen) April 10, 2025
We want to give negotiations a chance.
While finalising the adoption of the EU countermeasures that saw strong support from our Member States, we will put them on hold for 90 days.
If negotiations are not satisfactory, our…
The EC’s retaliatory response to Trump was agreed yesterday, and focused on €21bn (£18bn) of US goods, from almonds to yachts.
Our Europe live-blogger, Jakub Krupa, has pointed out this morning that Trump seemed surprised by the EU’s retaliation.
When told by the reporter about it, Trump laughed it was “bad timing,” with US secretary of commerce Howard Lutnick quickly intervening to say “they threatened, they picked a later date.”
But then, crucially, he added: “Our expectation is that it is going to be later still.”
Trump concluded: “I’m glad that they held back.”
Updated
AOC: It’s time to ban insider trading in Congress
Congresswoman Alexandria Ocasio-Cortez has called for any member of Congress who purchased stocks in the last 48 hours to disclose their dealings, amid concerns of market manipulation related to Donald Trump’s tariff announcements.
AOC posted on X:
I’ve been hearing some interesting chatter on the floor.
Disclosure deadline is May 15th. We’re about to learn a few things.
Any member of Congress who purchased stocks in the last 48 hours should probably disclose that now.
— Alexandria Ocasio-Cortez (@AOC) April 10, 2025
I’ve been hearing some interesting chatter on the floor.
Disclosure deadline is May 15th. We’re about to learn a few things.
It’s time to ban insider trading in Congress. https://t.co/YBKMGbraAu
The oil price, a gauge of recession fears, has dropped this morning.
Brent crude has weakened by 3.3% to $63.31 per barrel, wiping out some of yesterday’s rally during which oil rebounded from a four-year low.
Joshua Mahony, analyst at Scope Markets, cites concerns that the US-China trade war would hit demand for oil:
Despite the avoidance of heightened tariffs against some of the hardest hit countries, global demand concerns remains hugely prevalent as China and the US break trade ties.
Demand for crude looks to be an ongoing issue, and the joint push for higher production in OPEC and the US provides the basis for ongoing consternation in the energy space.
The US dollar is weakening this morning too against other major currencies.
The dollar index has lost 0.6% today, while the pound has gained half a cent to $1.2870.
Bas Kooijman, CEO and asset eanager of DHF Capital SA, explains:
The US Dollar could remain under pressure as markets weigh the risks around new developments in trade policy.
While President Trump’s announcement of a 90-day pause on most reciprocal tariffs could calm market concerns, levies on Chinese imports were raised to 125%, and uncertainty persists as the EU prepares a EUR 20 billion retaliation package, which could leave traders on edge.
Updated
Wall Street futures are down
Wall Street is set to fall when trading resumes later today, as some of the euphoria following Donald Trump’s tariff pause fades.
The Dow Jones industrial average is on track to fall by 1.3%, according to the futures market, with S&P 500 futures down 1.8%.
After the best day since 2008 yesterday, investors may be pondering the consequences of the US-China trade war escalating.
Tech stocks expected to drop back. Tesla are down 4.5% in pre-market, having surged by 22% yesterday.
S&P 500 FUTURES FALL 2.3%; NASDAQ 100 CONTRACTS DROP 2.8%
— First Squawk (@FirstSquawk) April 10, 2025
FTSE 100 on track for best day since 2020
After an hour and a half’s trading, the FTSE 100 index is still sharply higher – although it has dipped back from its early peak.
The blue-chip shares index is now up 320 points at 8001, up 4.2% today.
That would be its best day, in percentage terms, since 9 November 2020, the day when Pfizer and BioNTech announced that their coronavirus vaccine had been effective in trials.
But as flagged earlier, it still leaves the London market around 7.5% lower than before Donald Trump announced new tariffs on the rest of the world.
Matt Britzman, senior equity analys at Hargreaves Lansdown, says risk appetite has comes roaring back:
“The White House has finally seen some sense and given a whole host of countries a 90 day pause, with reciprocal tariffs immediately lowered to 10%, while isolating China in a tense battle. Was this Trump caving to pressure or his master plan all along? Who knows, but markets ripped on the news with the S&P 500 posting its 9th best day in history.
We still don’t know if this tariff strategy is going to do more harm than good, and this should not be confused with a resolution to the underlying impact on areas like inflation and global growth. But it does give a host of countries a chance to come to the table and barter for a deal, while offering companies some much needed time to make whatever supply chain adjustments they can. What this means for the EU is still unclear, but given countermeasures were already declared it could find itself on Trump’s naughty list, as ever we await more clarity.
Updated
UK supermarkets are mssing out on today’s rally, as City investors are disappointed by the latest results from market leader Tesco.
Tesco told shareholders this morning that it expects to make operating profits of between £2.7bn and £3bn for this financial year, down from the £3.1bn it made in 2024.
Tesco explains:
In the last few months, we have seen a further increase in the competitive intensity of the UK market.
That follows predictions that rival Asda will step up the grocery price war with cuts.
Shares in Tesco have fallen 4.6%, while supermarket Sainsbury’s are down 3.8%, two rare fallers on a strong morning for the London market.
Calm has returned to the bond markets after yesterday’s chaos, but borrowing costs remain worryingly high.
US Treasuries (America’s government debt) are strengthening in value, which pulls down the interest rate (or yield) on the bonds.
Ten-year Treasury yields have dropped by 10 basis points, to 4.29% from 4.39% on Wednesday.
Shorter-dated 2-year Treasury bill yields are down 11 basis points, while long-dated 30-year Treasury yields have dipped by 5bps.
It’s a slightly different picture for UK government debt, though. Two-year gilt yields have risen, as investors calculate there is less chance of the Bank of England cutting interest rates in May (see earlier post)
Ten-year gilt yields are a little lower, down 4 basis points at 4.7%.
There’s a bigger move on 30-year gilts, where yields are down 12 basis points at 5.4%. That move should be welcomed in the Treasury; yesterday, 30-year gilt yields hit their highest level since 1998, as the bond market panic threatened to devour all Rachel Reeves’s fiscal headroom.
Reminder: Donald Trump hasn’t completely spared the global economy from new tariffs.
As well as the 125% tariff on China, the rest of the world still faces a blanket 10% tariff on all US exports.
Updated
Chances of UK interest rate cut in May have fallen
The chances of a Bank of England interest rate cut as soon as next month have dropped, after Donald Trump blinked in his trade war.
The City money markets are currently indicating that a rate cut, from 4.5% to 4.25%, is a 78% chance, with a 22% possibility that BoE policymakers leave rates on hold.
Earlier this week, a rate cut was seen as certain, with a small possibility that the Bank slashed rates by half a percentage point to 4%, to protect the UK economy.
If you missed Wednesday’s u-turn, here’s a clip of Donald Trump explaining his decision to pause tariffs during an event in front of the White House yesterday:
This week’s market turmoil has clear implications for the US Federal Reserve (America’s central bank), explains Professor Costas Milas, of the University of Liverpool’s management school.
He tells us:
Today’s surge in stock prices confirms that stock markets are at the mercy of Donald Trump’s tweets/social media announcements (in Truth Social) which has added to extreme stock market volatility over the recent days.
Fed Chair Jerome Powell and the Fed’s policymakers will do well to avoid any stock market intervention via, for instance, interest rate cuts. This is because big drops in stock markets can/are very well be followed by even bigger stock market rises which will make any interest rate cut look foolish and therefore undermine the Fed’s reputation.
Today’s rollicking rally lifts the UK’s FTSE 100 share index up to its highest level since Friday afternoon (when trade war fears were driving shares down).
But as this chart shows, shares are still much lower than before Donald Trump unveiled a swathe of new tariffs on US trading partners (and some penguins).
Last Wednesday (Trump’s ‘Liberation Day’), the FTSE 100 ended the day at 8,608 points, a few hours before the president intensified his global trade war.
We’re still 5% below that level….
France’s CAC 40 share index is also strengthening firmly, up 6.5% in early trading.
Markets across Europe have joined the global relief rally.
Germany’s DAX is 8% higher, Italy’s FTSE MIB has gained 7.5%, and Spain’s IBEX is up 7.2%.
FTSE 100 jumps 6%
Boom! The London stock market is rocketing higher, amid relief that Donald Trump pulled back from his global trade war yesterday.
The FTSE 100 index of blue-chip shares has jumped by 6.2%, wiping tens of billions of pounds back onto the nation’s savings and pension funds.
The FTSE 100 has jumped by 485 points to 8166 points, clawing back all its losses from earlier this week.
Barclays bank is leading the rises, surging by 21%, followed by engineering firm Melrose who are 16% higher. Mining stocks are also rallying, reflecting hopes that a global downturn can be averted.
Matthew Ryan, head of market strategy at global financial services firm, Ebury, says:
“A little over 48 hours after the White House resoundingly quashed the idea of a delay to the levies, President Trump announced that US tariffs above 10% would be postponed by 90 days for most countries, with the notable exception of China, which had its total additional tariffs hiked to 125%, from 104%.
“Market participants rejoiced in the hope that the delay will allow room for negotiation, compromise and an ultimate softening in the tariffs that would limit the global economic fallout. Clearly there are no guarantees with Trump, but this seems increasingly likely (markets obviously believe that it is).
“It feels incomprehensible that the tariffs would remain in place at such devastatingly high levels given the profound implications for the US economy, which would almost certainly be staring down the barrel of recession - not exactly a black mark that the 47th President would want tarnishing his legacy.
The London stock market is opening slowly as market makers try to match buy and sell orders….
The FTSE 100 index has gained over 1%, but around half the stocks on the index haven’t actually traded yet….
Updated
France’s top central banker has warned that US President Donald Trump’s policies in recent weeks have eroded confidence in the US dollar.
Francois Villeroy de Galhau told France Inter radio that the protectionism and unpredictability of the Trump administration were “bad elements” for the US economy, Reuters reports.
Donald Trump’s trade war with China has entered a new phase, as Beijing’s 84% retaliatory tariffs came into effect hours after the US president announced a pause of steep reciprocal tariffs on dozens of countries except China.
European stocks set to surge at the open
European stock markets are expected to surge when trading begins in under half an hour.
The futures market shows that London’s FTSE 100 is expected to jump by almost 400 points, or over 5%.
Germany’s DAX index is set for a 7% leap, on relief that Donald Trump yesterday delayed new tariffs for 90 days, with countries (except China) facing the new ‘baseline’ 10% tariff instead.
It could be a strong day for financial stocks, with the Eurostoxx Banks index futures up over 10%.
This follows the dramatic rebound on Wall Street last night, where the S&P 500 index recorded its third-best day since the second world war.
Deutsche Bank’s market strategist, Jim Reid, sums up the situation:
Market turmoil turned into elation yesterday as Trump announced a 90 day pause on reciprocal tariffs for countries other than China, which marked a sizable backing off from last week’s tariff escalation. That triggered a sharp relief rally as the S&P 500 soared by +9.52% in its best day since October 2008. Other risk assets including credit and commodities also gained, with gold (+3.33%) posting the biggest daily advance since 2023, while 2yr Treasury yields (+18.2bps) saw their largest rise in 6 months.
Starting with the tariff announcement, Trump posted that he would pause for 90 days specific reciprocal tariff rates on non-retaliating countries, with all such countries instead facing a minimum additional tariff rate of 10%. The one exception was China, which Trump said would instead face even higher 125% tariffs, up from 104% the previous day. That came in response to China announcing earlier yesterday higher 84% reciprocal tariffs on US goods, effective today.
Wall Street surge prompts market manipulation claims, as traders cash in
The dizzying turnaround on Wall Street yesterday provided a historic opportunity to make a quick profit, if you timed it right.
That’s why acccusations of market manipulation have been flying around for the last 12 hours.
Democrats on the House Committee on Financial Services claimed yesterday that president Trump is “literally engaging in the world’s biggest market manipulation scheme,” having posted that it was “a great time to buy” just hours before pausing most of his new tariffs.
Hours before his 90-day tariff pause announcement. The President of the United States is literally engaging in the world's biggest market manipulation scheme. pic.twitter.com/lHyU4xp4y7
— House Committee on Financial Services - Democrats (@USHouseFSC) April 9, 2025
According to financial data operator Unusual Whales, some traders did make money by buying call options on the S&P 500 and Nasdaq indices early on Wednesday. Their value soared once Trump announced the 90-day pause.
Alright, I think people knew of the tariff pause and traded it beforehand.
— unusual_whales (@unusual_whales) April 9, 2025
You can see before Trump posted "buy" on Truth Social, traders opened $QQQ $TQQQ and $SPY calls
RIGHT BEFORE THE NEWS, someone opened $SPY 509 calls, expiring TODAY!!!!!!!!!!!!!!!!!!!!
Those calls are… pic.twitter.com/8hG2i5Oijt
It’s possible that some investors simply concluded that the turmoil in the bond market yesterday would force a u-turn from the White House, which would predictably boost equities.
The Washingon Post reports that the White House has pushed back on the idea that Trump improperly manipulated the markets.
White House spokesman Kush Desai said in an emailed statement.
“It is the responsibility of the President of the United States to reassure the markets and Americans about their economic security in the face of nonstop media fearmongering,”
City experts: Trump blinked
White House officials have been trying to spin the events of recent days as a tactical masterclass from president Trump, but City experts sound unconvinced.
Homeland Security Adviser Stephen Miller was the most bullish, declaring on X:
You have been watching the greatest economic master strategy from an American President in history.
President Trump’s master strategy, bold statesmanship and brilliant tactical planning has done more to reform broken international trade in days than anyone has achieved in decades while economically and politically isolating the global architect of economic aggression: China.
— Stephen Miller (@StephenM) April 9, 2025
However, analysts argue that Trump has blinked, concluding that the worrying slump in bond prices on Wednesday prompted a 90-day pause on new tariffs (excluding China).
Mohit Kumar of investment bank Jefferies tells clients this morning:
Over the last few days, we’ve been in the camp that Trump will need to back down. It’s a battle that he can’t win and the policy was not only having an adverse effect on markets with lower equities, higher rates and weaker dollar but also driving its trading partners towards China which was not something that the US wants from a geopolitical perspective.
Hence, from Trump’s point of view it would be easier to get a quick deal with rest of the world and deal with China in isolation.
The ‘blink’ came sooner than we expected, probably forced by the markets. The reversal is in sharp contrast to the fanfare with which Trump unveiled his tariff policy just a week ago.
Economist Nouriel Roubini says the Trump tariff u-turn is “the revenge of the bond/stock/credit vigilantes!!””.
He posted on X:
The market discipline that forced Trump to blink was not only a bear market in equities but also and more importantly the spike in bond yields and credit spreads (especially HY [high yield debt]) and the risk of a disorderly collapse in the dollar.
So Trump blinked and decided for the 90 days tariff pause. Now the big issue is whether US and China find a way to de-escalate their trade war.
The revenge of the bond/stock/credit vigilantes!! As I predicted, in this 3-way game of chicken between Trump , Powell and Xi, Powell did not blink before Trump and the tit-for-tat trade escalation between Trump and Xi continued as neither side blinked relative to the other.… https://t.co/gqaKP5QXvM
— Nouriel Roubini (@Nouriel) April 10, 2025
Michael Brown, senior research strategist at Pepperstone, compared Trump to North London’s finest (?) football team, writing:
In short – Trump did his best impression of Tottenham Hotspur FC, and bottled it under pressure. As stocks teetered on the brink of a bear market, and Treasuries sold-off across the curve, he caved on his signature tariff policy.
Interim summary
Hello and thanks for following our live coverage of what has been a rocky few days on global markets following President’s Trump’s shock announcement of punitive reciprocal tariffs, and now a 90-day pause for most countries, with the exception of China.
Tensions between the world’s two largest economies escalated today with China’s 84% tariffs on US imports coming into effect just hours ago.
The move was in response to Trump’s decision to hike tariffs on China to 125%.
Here is quick recap of developments to bring you up to speed.
China’s countermeasures against the US came into effect just after midday in Beijing on Thursday in retaliation against Trump’s tariff hike on Chinese imports to 125%. Beijing has vowed to “fight to the end”, refusing to back down in the face of Trump’s efforts to bring the world’s governments to the negotiating table. The country’s commerce minister has described the tariffs as “a serious infringement of the legitimate interests of all countries”.
After days of seemingly doubling down on his position, Trump announced a 90-day pause on the proposed reciprocal tariffs for most countries, except China. Asked about his stunning U-turn, Trump said: “Well, I thought that people were jumping a little bit out of line. They were getting yippy. They were getting a little bit afraid.”
Asian markets, from Tokyo, to Hong Kong and Shanghai, responded positively to Trump’s tariff reprieve, with stocks rising across the board. The Hang Seng Index has climbed over 3%, or 632 points, to 20,896.95, while the Shanghai Composite Index jumped 1.29%, or 41.03 points, to 3,227.84.
Global markets also surged after Trump announced his 90-day tariff pause. The S&P 500 surged 9.5%, while the Nasdaq jumped 12%.
Despite the market rebound, the head of the World Trade Organization said the US-China tariff war could cut trade in goods between the two countries by 80%. Given the two economic giants account for 3% of world trade, the conflict could “severely damage the global economic outlook”, Ngozi Okonjo-Iweala said.
Addressing reporters at the White House, treasury secretary Scott Bessent said the latest changes in Donald Trump’s tariffs policy was Trump’s “strategy all along.” He said: “This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded.”
China and the US have traded tit-for-tat tariff hikes repeatedly over the past week. “I want to emphasize that there is no winner in a trade war, and that China does not want a trade war. But the Chinese government will by no means sit by when the legitimate rights and interests of its people are being hurt and deprived,” an official of China’s ministry of commerce said in a statement on Wednesday.
The tariff reprieve has been welcomed in South Korea, Taiwan, and Vietnam, where governments have said the pause will allow them “breathing room” and time to negotiate with the Trump administration.
China and the European Union have exchanged views on strengthening their economic and trade cooperation in response to US tariffs, the Chinese commerce ministry said on Thursday. In a video call on Tuesday, China’s commerce minister Wang Wentao discussed with European trade and economic security commissioner Maros Sefcovic the restart of talks on trade relief and to immediately carry out negotiations on electric vehicle price commitments.
Not long after he slapped the world’s second-largest economy with a 125% tariff, Trump posted this message on Truth Social at 01:00 in Washington.
“What a day, but more great days coming!!!”
The president also raised eyebrows with another post earlier in the day, as the market was experiencing major swings.
“THIS IS A GREAT TIME TO BUY!!!” he wrote at 9.37am local time, prompting some Democrats to question whether the president was manipulating stock markets.
The US trade representative denied these claims saying the administration is “trying to reset the global trading system”.
Vietnam and the United States agreed to start negotiations on a reciprocal trade agreement, Hanoi said Thursday, hours after Washington delayed imposing an enormous tariff on the Southeast Asian manufacturing powerhouse, Agence-France Presse reports.
The United States was Vietnam’s biggest export market in the first three months of the year, but President Donald Trump hit it with a 46% duty as part of a global trade blitz announced last week.
After Trump paused the stiff new tariffs on Wednesday, Vietnam’s Deputy Prime Minister Ho Duc Phoc suggested the two countries “should soon negotiate a bilateral trade agreement... to promote stable and mutually beneficial economic and trade relations”, according to a statement on the government news portal.
Phoc has been appointed by top leader To Lam to negotiate with the United States on tariffs, and he met with US Trade Representative Jamieson Greer on Wednesday.
“The United States agreed that the two sides should initiate negotiations on a reciprocal trade agreement, which would include tariff agreements, and asked technical levels from both sides to begin discussions immediately,” according to the government statement.
Experts said the levy could seriously damage Vietnam’s growth model, which relies heavily on exports to the United States.
China consumer prices fall as Beijing battles persistent deflation
Consumer prices in China fell in March for the second straight month, Reuters reports citing official data, as the world’s second-largest economy struggles to boost spending and a trade war with the United States deepens.
While deflation suggests the cost of goods is falling, it poses a threat to the broader economy as consumers tend to postpone purchases under such conditions, hoping for further reductions in prices. A lack of demand can then force companies to cut production, lay off workers and potentially discount existing stocks.
The consumer price index – a key measure of inflation – was down 0.1% year-on-year in March, according to data released by the National Bureau of Statistics. The figure came in slightly lower than expected by analysts surveyed by Bloomberg, who predicted the index would remain unchanged. But the index’s decline narrowed from the 0.7 percent drop year-on-year in February. The prices of food, tobacco and alcohol fell by 0.6%.
The drop comes as Beijing seeks to boost domestic consumption, which has yet to recover to pre-pandemic levels and is further threatened by a trade war with the US.
Earlier this week Chinese state media and foreign ministry were spreading a clip of former US president Ronald Reagan in 1987, decrying tariffs as leading to retaliation and ultimately hurting the US economy, in obvious reference to Trump’s tariff regime.
Today they’re sharing a speech by former Chinese leader Mao Zedong.
“As to how long this war will last, we are not the ones who can decide,” he says. “It used to depend on president Truman, and it will depend on president Eisenhower, or whoever becomes the next US president. It’s up to them.”
“No matter how long this war is going to last, we will never yield,” he says to applause. “We’ll fight until we completely triumph.”
The clip is an excerpt of Mao’s speech to the closing session of the 1953 CPPCC political meeting. He’s referencing the Korean war, during which China supported the North and the US supported the South. But stripped of the specifics, China’s current foreign affairs spokeswoman, Mao Ning, suggests the rhetoric applies today.
“We are Chinese. We are not afraid of provocations. We don’t back down,” she said in the caption.
What impact will the tariffs have?
The head of the WTO said Wednesday that the US-China tariff war could cut trade in goods between the two countries by 80%.
Given the two economic giants account for 3% of world trade, the conflict could “severely damage the global economic outlook”, Ngozi Okonjo-Iweala said.
Analysts expect the levies to take a significant chunk out of China’s GDP, which Beijing’s leadership hope will grow 5% this year, AFP reports.
Likely to be hit hardest are China’s top exports to the United States - everything from electronics and machinery to textiles and clothing, according to the Peterson Institute of International Economics.
And because of the crucial role Chinese goods play in supplying US firms, the tariffs may also hurt American manufacturers and consumers, analysts have warned.
Paul Ashworth, chief North America economist at Capital Economics, said it was “difficult to see either side backing down in the next few days”.
But, he added, “talks will eventually happen, although a full rollback of all the additional tariffs... appear unlikely”.
China's countermeasures come into effect
China’s countermeasures against the US have come into effect, raising tariffs on all US imports to 84% in retaliation against Trump’s tariff hike on Chinese imports to 125%.
The escalating trade war between the world’s two largest economies has reached extraordinary levels of cumulative tariffs and counter-tariffs, with neither side suggesting they’ll back down.
Beijing has vowed to “fight to the end”, refusing to back down in the face of Trump’s efforts to bring the world’s governments to the negotiating table.
China announced reciprocal tariffs of 34% in retaliation to Trump’s first round, on what he termed “liberation day”. Trump warned China to withdraw it or he would raise theirs again. China refused, and the two sides embarked on a series of tit-for-tat raises. With Trump pledging 125% against Chinese imports, Beijing said it would impose 84% on US products, now in effect. It has also put 18 US companies on trade restriction lists, among other countermeasures.
A China Daily editorial published last night says “caving in to the US pressure is out of the question for Beijing”.
“It is not that China does not understand what the unprecedentedly high tariffs mean for its exports and the economy in general. Profits of export-oriented industries will take a blow and the resulting decline in manufacturing investment and consumer sentiment will dampen economic growth.
“But it also knows that kowtowing to the US’ tariff bullying will gain it nothing, given that it is no secret the US is now intent on cutting China out of its consumer market and reshaping the global supply chains to serve its own narrow interests.”
China now appears to be approaching other nations in an apparent attempt to shore up trading agreements away from the US and its punitive tariffs. Markets responded positively to Trump’s pause, including in China. Major Chinese trading markets had mostly weathered the carnage seen across the world earlier this week, apparently due to government interventions.
Japan 'strongly’ demands US reviews other tariffs
Japan’s government said Thursday it received US Donald Trump’s pause on new tariffs “positively” but still “strongly” demands that Washington reconsider other levies, AFP reports.
“We received the latest US announcement positively,” chief government spokesman Yoshimasa Hayashi told a regular briefing.
But he added: “We continue to strongly demand that the United States reviews measures on its reciprocal tariffs, tariffs on steel and aluminium, and tariffs on vehicles and auto parts.”
Trump’s announcement last week of sweeping “reciprocal” tariffs for a slew of countries included a 24% levy on imports from Japan, the world’s fourth-biggest economy.
Stocks in Indonesia, which was set to be slapped with a 32% tariff, have followed suit with other Asian markets, with the country’s benchmark stock index nearly 5% higher at the open on Thursday after Trump’s 90-day pause.
The Jakarta Composite Index was up 289.2 points, or 4.85%, to 6,257.18 shortly after markets opened on Thursday, two days after stocks tanked more than 7% in their biggest drop since 2011, Reuters reports.
Republicans are quietly pushing a procedural rule that would curb the power of the US Congress to override Donald Trump’s chaotic tariff policy.
The House of Representatives’ rules committee on Wednesday approved a measure that would forbid the House from voting on legislation to overturn the president’s recently imposed taxes on foreign imports.
The sleight of hand was embedded in procedural rule legislation setting up debate on a separate issue: the budget resolution that is central to Trump’s agenda.
If adopted, the rule would in effect stall until October a Democratic effort to force a floor vote on a resolution disapproving of the national emergency that Trump declared last week to justify the tariffs. This mirrors a similar tactic used previously to shield Trump’s earlier tariffs.
The move came as Trump announced a major reversal on Wednesday, with a 90-day pause on tariffs for most countries while raising them to 125% for China.
Tariff reprieve provides breathing room, time for negotiations, say Korea and Taiwan
There have been sighs of relief in Asia after Trump announced his 90-day tariff pause, with South Korea’s top trade envoy Cheong In-kyo saying on Thursday the pause had provided room for negotiations, as the country seeks to reduce tariffs through talks.
Cheong met US trade representative Jamieson Greer about lowering tariff rates slapped on the country and delivered concerns about US tariffs, the trade ministry.
Meanwhile in Taiwan, which was due to be hit with a 32% tariff, the foreign minister Lin Chia-lung said the government was dedicated to increasing its purchases from and investments in the United States and to reduce the island’s trade surplus with its most important international backer.
“Now that we have an additional 90 days, we can discuss Taiwan-U.S. economic and trade cooperation in a more detailed and in-depth manner,” he said.
Taiwan President Lai Ching-te on Sunday pledged to seek a zero tariff regime with the US, and said that Taipei would not retaliate in response to the tariffs.
Updated
China and the European Union have exchanged views on strengthening their economic and trade cooperation in response to US tariffs, the Chinese commerce ministry said on Thursday, according to Reuters news agency.
In a video call on Tuesday, China’s commerce minister Wang Wentao discussed with European trade and economic security commissioner Maros Sefcovic the restart of talks on trade relief and to immediately carry out negotiations on electric vehicle price commitments, the Chinese ministry statement said.
The conversation came shortly before US President Donald Trump’s additional tariffs on China started taking effect.
The EU had imposed additional tariffs of up to 35.3% on China-made electric vehicles at the end of October after an anti-subsidy investigation, on top of the bloc’s standard 10% car import tariffs.
The commerce ministry said last week that the two sides have agreed to restart negotiations on minimum price commitments on Chinese EVs but did not specify when that would resume.
Updated
Markets in Asia have continued to react positively to Trump’s 90-day pause.
In Hong Kong, stocks surged on Thursday, while Shanghai also advanced even as the US president ramped up levies on China.
The Hang Seng Index climbed 2.69%, or 545.94 points, to 20,810.43, while the Shanghai Composite Index jumped 1.29%, or 41.03 points, to 3,227.84.
Updated
Here is a look at the full list of tariffs Trump originally threatened – and the new updated rate country by country:
Following other markets in the region, Taiwan stocks surged 9.2% in early trading on Thursday, tracking global markets higher, after US President Trump suspended his highest trade tariffs, except for those on China.
The Taiex index jumped 1,590.79 points to 18,982.55 in the first five minutes of trading, as Taiwanese tech giants TSMC soared 10% and Foxconn 9.8%.
Updated
Asia stocks rebound after Trump tariff reversal
Stocks in Asia rebounded strongly on Thursday after US President Donald Trump’s stunning reversal on sweeping reciprocal tariffs.
In Japan, the Nikkei 225 was up 7.2% to 33,999.33, while in Seoul the Kospi was up over 5%. In Australia the ASX 200 jumped more than 6%.
On Wall Street Wednesday, the Dow index soared to close nearly 8% higher while the Nasdaq rose 12.2% to notch its best day in 24 years.
Updated
Australia rebuffs China’s appeal to 'join hands' in trade
Australia has rebuffed China’s appeal to “join hands” to defend trade on Thursday, as Beijing looks for partners to help it blunt US tariffs now ratcheted up to 125%, according to a report by Agence France-Presse.
Ambassador Xiao Qian urged Australia and other trading partners to “jointly respond to the changes of the world” in an opinion piece written for a Sydney newspaper.
“Under the new circumstances, China stands ready to join hands with Australia,” Xiao wrote for the Sydney Morning Herald.
But Australia’s defence minister Richard Marles was quick to pour cold water on notions of Canberra and Beijing uniting in “common cause”.
“We’re not about to make common cause with China, that’s not what’s going to happen here,” Marles told Australia’s Nine News.
“I don’t think we’ll be holding China’s hand.”
“We don’t want to see a trade war between America and China, to be clear, but our focus is on actually diversifying our trade.”
Tariffs a 'serious infringement' on all countries, China's commerce minister says
Hours before China’s reciprocal tariffs are to take effect, the country’s commerce minister has said the ‘reciprocal tariffs’ by the US are “a serious infringement of the legitimate interests of all countries”.
In a report in Chinese state media Xinhua, an official from the ministry was earlier quoted as saying that no one would win in a trade war.
I want to emphasize that there is no winner in a trade war, and that China does not want a trade war. But the Chinese government will by no means sit by when the legitimate rights and interests of its people are being hurt and deprived,” the official said on Wednesday.
In a stunning U-turn, Trump has reversed high tariffs on most nations – at least for 90 days. But the focus is now on China, the second-biggest provider of US imports, of which the pause does not apply.
Instead, Trump has raised tariffs on China to 125%, while China has announced new tariffs of 84% on all US imports, further escalating a high-stakes confrontation between the world’s two largest economies.
As our China correspondent Amy Hawkins writes in this insightful analysis, China is unlikely to blink first. One of the most helpful factors in Beijing’s favour is the fact that the US is far more dependent on Chinese imports than China is on the US.
For President Xi, there is only one politically viable response to Trump’s latest threat: Bring it on! Having already surprised domestic audiences with a forceful 34% reciprocal tariff, any appearance of backing down would be politically untenable,” says Diana Choyleva, founder and chief economist at Enodo Economics, a forecasting firm.”
Opening summary
Hello, and thanks for following our live coverage of what has been a tumultuous week on global markets, triggered by US President Trump’s shock tariff policy.
The upheaval erased trillions of dollars from stock markets and led to an unsettling surge in US government bond yields that appeared to catch the president’s attention.
Trump has now announced a 90-day pause on the proposed reciprocal tariffs for most countries, except China, whose tariffs he raised to 125% on Wednesday.
Asked about his stunning backtrack, Trump said: “I thought that people were jumping a little out line” and “getting a little bit afraid”.
If you are just getting up to speed, here is the latest on Trump tariffs.
Global markets surged after Trump announced his 90-day tariff pause. The S&P 500 surged 5.6%, while the Nasdaq has jumped over 8%. Trump’s Truth Social statement suggests he has backed down on tariffs on most countries for 90 days, applying instead a 10% tariff.
However, Trump’s pause does not apply to China, which has announced new tariffs of 84% on imports of all US goods, up from the 34% previously announced, hours after US tariffs on Chinese products went up to a staggering 104%. China’s retaliation sent stock markets falling further with major indices down in the UK, Germany, France and Spain.
China’s 84% tariffs on US imports will come into effect at 12.01pm on Thursday, according to Chinese state news agency, Xinhua.
The two countries have traded tit-for-tat tariff hikes repeatedly over the past week. “I want to emphasize that there is no winner in a trade war, and that China does not want a trade war. But the Chinese government will by no means sit by when the legitimate rights and interests of its people are being hurt and deprived,” an official of China’s ministry of commerce said in a statement on Wednesday.
Addressing reporters at the White House on Wednesday, treasury secretary Scott Bessent said the latest changes in Donald Trump’s tariffs policy was Trump’s “strategy all along.” He said: “This was his strategy all along, and that you might even say that he goaded China into a bad position, they responded.”
The WTO chief said the US-China tariff war could reduce trade in goods between the two economic giants by 80%, pulling down the rest of the world economy. Ngozi Okonjo-Iweala said that the US-China tariff war could reduce trade in goods between the two countries by 80%.
The EU announced 25% tariffs on a range of US imports in a first round of countermeasures. The 27-member bloc has agreed to impose retaliatory tariffs on €21bn (£18bn) of US goods, targeting farm produce and products from Republican states. All member states voted for the retaliation, with the exception of Hungary.
Trump’s 90-day pause on tariffs may not exempt the 25% tariff on cars, Ireland’s deputy prime minister has revealed, after a face-to-face meeting with US commerce secretary Howard Lutnick. Simon Harris, the first EU politician to meet anyone in Trump’s administration since the tariffs were announced last Wednesday, said he spoke to the European trade minister Maroš Šefčovič immediately after his bilateral meeting in Washington today.
Trump has in particular targeted the pharmaceutical industry, saying: “We’re going to put tariffs on the pharmaceutical companies, and they’re going to all want to come back.” It’s an idea he has raised before.
US markets recovered later on Wednesday after Bessent indicated America was open to trade agreements with allies and a subsequent group deal with China. In his first comments since China’s 84% tariff announcement, Trump urged Americans to “be cool”. The US president bragged about countries “kissing my ass” to negotiate tariffs during a Tuesday-night dinner.
Stock markets soared after Donald Trump shelved plans to hike tariffs on most countries except China, unveiling a 90-day pause and pulling back from his global trade war after days of market turmoil and warnings of recession.
On Wall Street, the benchmark S&P 500 rallied by 9.5% – its biggest single-day increase since 2008.
The Dow Jones industrial average jumped 7.9%. The technology-focused Nasdaq Composite climbed 12.2% – its best day since 2001 – as shares in tech giants like Apple and Nvidia surged.
After insisting for days that he would hold firm on his aggressive trade strategy, Trump announced that all countries that had not retaliated against US tariffs would receive a reprieve – and only face a blanket US tariff of 10% – until July.
Asked why he had ordered the pause, the US president told reporters: “People were jumping a little bit out of line. They were getting yippy.”
As Beijing prepared to slap punishing 84% tariffs on US goods from tomorrow, however, Trump said he would raise US tariffs on Chinese exports to 125% effective immediately.
