Daily Summary
We’re wrapping up another day of historic news here in the US, but my Australian colleagues have a new day’s updates on the global tariff chaos here. (Someone at the Guardian is always awake.)
An updated summary of today’s key events:
Global markets surged after Trump announced his 90-day tariff pause, in one of the biggest gains since the second world war. 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.
Speaking to reporters on Wednesday about his tariffs policy, Trump acknowledged people were getting “a little bit afraid” and said: “I thought that people were jumping a little out line” and getting “yippy”. He added that his announcement on the 90-day pause and 125% raise on China could be “temporary.”
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.”
Some world leaders responded positively to the tariff pause, including Canadian Prime Minister Mark Carney, who called it a “welcome reprieve.”
Trump’s ‘buy’ tip on social media before his announcing his tariffs pause made money for investors who listened, and also raised concerns for ethics experts, who questioned whether the post amounted to Trump giving stock tips on inside information, a violation of securities law. A White House spokesman said the president has the right to “reassure the markets.”
Asked when exactly he had decided to implement his tariff pause, Trump gave a muddled answer, saying that he had been considering it for some time, but also that “it came together early this morning,” and adding that “we didn’t have access to lawyers. We just wrote it up from our hearts, right?”
China 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.
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.
South Korea’s top trade envoy Cheong In-kyo said that Donald Trump’s tariff reprieve had provided room for negotiations, as the country seeks to reduce tariffs through talks, Reuters reports.
Cheong flew to Washington to negotiate with US fficials after President Trump announced a 25% tariff on its key Asian ally among a new set of sweeping tariffs.
In a stunning reversal on Wednesday, Trump said he would temporarily lower the hefty duties he had just imposed on dozens of countries while further ramping up pressure on China.
Cheong found the reprieve “positive”, but swift consultations with Washington are still needed to minimise impact, considering South Korea’s exports to China, and any balloon effect, he told reporters.
Fact-checking Trump’s claim about coal as a ‘clean’ energy
The Associated Press has an extensive fact-check of the claims Trump made today about coal as an “clean” energy source, as he signed four executive orders designed to help the struggling US coal industry. For example:
TRUMP: “It’s cheap, incredibly efficient, high density and it’s almost indestructible.”
THE FACTS: Coal is one of the most expensive sources of new power generation.
Read the full Associated Press coal fact-check here, and read more details on Trump’s coal-related executive orders here.
Trump signs executive order on water pressure to ‘restore shower freedom’
A global trade war roller coaster was not enough to distract Donald Trump from fulfilling one of his longtime priorities Wednesday: changing the federal definition of “showerhead”, a move the White House said would “end the Obama-Biden war on water pressure”.
Trump has complained for years about inadequate water pressure in American showers, sinks and toilets, and has blamed federal water-conservation standards for the problem.
“By restoring shower freedom, President Trump is following through on his commitment to dismantle unnecessary regulations and put Americans first,” the White House said in a statement on the executive order.
Brazilian President Luiz Inacio Lula da Silva said today that his nation will be reciprocal on tariffs announced by the US, but noted that Brazil will “use every word for negotiation that is in the dictionary” first, Reuters reports.
Speaking to journalists after the Community of Latin American and Caribbean States (CELAC) summit in Honduras, Lula added that after the negotiations Brazil “will make the appropriate decisions”.
Trump's 'buy' tip on social media before his tariffs pause made money for investors who listened
President Donald Trump offered some financial advice on Wednesday morning that ended up making a lot of money for any lucky investor who listened to him, the Associated Press reports.
Trump posted on his social media platform Truth Social that it was “a great time to buy.” Less than four hours after his post, Trump announced a 90-day pause on nearly all his tariffs. Stocks soared on the news, closing up 9.5% by the end of trading.
That has a few ethics lawyers worried that he may be giving stock tips on inside information, a violation of securities law. A White House spokesman said the president has the right to “reassure the markets.”
Kathleen Clark, a government ethics law expert at Washington University School of Law, says Trump’s post in other administrations would have been investigated, but is not likely not to trigger any reaction, save for maybe more Truth Social viewers.
“He’s sending the message that he can effectively and with impunity manipulate the market,” she said, “As in: Watch this space for future stock tips.”
‘Anonymous’ Trump official responds to president’s order to investigate him
During his busy afternoon, Trump also signed directives targeting two former government officials who criticized him during his first term, calling one of them a traitor and saying they should be investigated, Reuters reports
One of Trump’s directives named Christopher Krebs, his former cybersecurity chief, and said any security clearance he has would be revoked. A second presidential memorandum targeted Miles Taylor, who was a top official at the Department of Homeland Security during Trump’s first term and anonymously wrote a 2019 book criticizing the then-president.
The order stripped Taylor of any security clearance he might have and ordered the Justice Department to investigate him. Trump said he thought Taylor was “guilty of treason” as he signed the order.
In response, Taylor said via text message: “I said this would happen. Dissent isn’t unlawful. It certainly isn’t treasonous. America is headed down a dark path.”
Updated
Amidst the flurry of executive orders Donald Trump signed today was one that aims to boost energy production by automatically cutting “outdated” regulations, Reuters reports.
By “outdated” regulations, the White House means virtually all regulations. The order directs ten agencies and subagencies to assign one-year expiration dates to existing energy regulations. If they are not affirmatively extended, they will expire no later than September 30, 2026, according to a White House fact sheet on the order.
“Zero-based regulation uses the bureaucracy against itself. If bureaucrats move slowly, the default is deregulation and free markets,” the White House said in the fact sheet.
The order also said any new regulations should include a five-year expiration, unless they are deregulatory. That means any future regulations would only last for five years unless they are extended.
The move is the latest in a string of efforts by Trump’s administration to pump up domestic energy output, loosen government policies and remake the US energy landscape.
Updated
Canadian PM Carney hails 'welcome reprieve' on tariffs
Canadian Prime Minister Mark Carney on Wednesday welcomed Donald Trump’s 90-day pause on some tariffs charged on trading partners, Reuters reports.
“The pause on reciprocal tariffs announced by President Trump is a welcome reprieve for the global economy,” Carney said in a post on X.
Updated
Wondering how federal workforce cuts might affect US national parks? An update:
Interior department staff, including those at national parks, have been offered buyouts and early retirement, the Associated Press reports.
Employees across the Department of the Interior have until the end of Wednesday to respond to the latest offer to take buyouts or early retirement, according to a document obtained by the Associated Press, as the Trump administration continues its efforts to reduce the federal workforce.
The offer for deferred resignation, often described as a buyout, or early retirement was sent 4 April – one day after Doug Burgum, the interior secretary, issued an order for national parks to “remain open and accessible” and directing officials to ensure proper staffing.
Not all workers can take the buyouts or retire early. Among the workers exempt from the offer are wildland firefighters, law enforcement officers, aviation jobs and cybersecurity positions.
Updated
Bernie Sanders has released a statement condemning “Trump’s trade chaos.” Here’s a highlight from the full statement:
As someone who strongly opposed disastrous unfettered free trade deals with China, Mexico and other low-wage countries, I understand that we need trade policies that benefit American workers, not just large corporations. Targeted tariffs can be a powerful tool to stop corporations from outsourcing American jobs. They can help level the playing field for American autoworkers or steelworkers to compete fairly against companies who have moved production to countries where they can pay starvation wages.
But Trump’s chaotic across-the-board tariffs are not the way to do it.
Imposing steep tariffs on countries like Germany or France will not bring jobs back to America. These are not low-wage countries. Corporations are not shutting down plants in America and moving them to Switzerland. Trump’s blanket tariffs will just raise prices for American consumers and hurt our relationships with allies, undermining our global position.
Microsoft said it is “slowing or pausing” some of its data center construction, including a $1 billion project in Ohio, the latest sign that the demand for artificial intelligence technology that drove a massive infrastructure expansion might not need quite as many powerful computers as expected, the Associated Press reports.
The tech giant confirmed this week that it is halting early-stage projects on rural land it owns in central Ohio’s Licking County, outside of Columbus, and will reserve two of the three sites for farmland.
The day so far
It’s 6pm on the US east cost – thanks for following along with us as we head into the evening. Here’s a reminder of the day’s key events so far:
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.
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.
“We’re going to put tariffs on the pharmaceutical companies, and they’re going to all want to come back,” Donald Trump said this afternoon, an idea he has raised before. “They’re going to come back – I’m not going to pay them any money.”
Speaking to reporters on Wednesday about his tariffs policy, Trump acknowledged people were getting “a little bit afraid” and said: “I thought that people were jumping a little out line” and getting “yippy”. He added that his announcement on the 90-day pause and 125% raise on China could be “temporary.”
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%.
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.”
China 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.
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.
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.
Updated
Here is a look at the full list of tariffs Donald Trump originally threatened – and the new updated rate country by country:
Trump repeated his threat to use military force if Iran did not agree to end its nuclear program, saying Israel would play a key role, Reuters reports.
Speaking to reporters, Trump said Iran could not be allowed to have a nuclear weapon.
Trump’s executive orders today include one targeting water pressure in the shower. Trump has signed an executive order that aims to roll back water efficiency standards on appliances, according to the White House, the Associated Press reports.
That prompted the president to muse about how he likes to let the water run in the shower and how new faucets are disappointing.
“In my case, I like to take a nice shower to take care of my beautiful hair,” Trump said.
Anytime you see a new faucet, he said, “you know it’s going to be a long wash of the hands.”
Donald 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.
He told national broadcaster RTE: “I spoke to Maroš straight after the meeting to update him on the details from our discussion with Secretary Lutnick. I think 90 days is a significant period of time. Whether it’s enough remains to be seen … there are still clarifications needed. It looks like, for example, the higher rate on cars and steel and aluminum is likely to remain, and 10% tariffs still aren’t good.
“Tariffs are bad. So we need to be cautious in relation to this. But crucially, what this has done is provide the space that the European Commission, European member states and Ireland has been calling for.
“It’s been a big part of our diplomatic and political effort over the last while to try and create space for real and meaningful engagement.”
In relation to the threat to impose tariffs on pharmaceuticals being exported from Ireland to the US he added: ““I did also take the chance to talk to the secretary about the two-way relationship between Ireland and the United States, and I must say, he spoke favorably in relation to the Irish economic model and our economic success to date.”
Updated
Trump said the idea for today’s tariff pause came together “without access to lawyers”.
“Was this idea of a [tariff] pause … did this just come about this morning?” a journalist asked Trump.
“For a period of time, I wouldn’t say this morning. Over the last few days I’ve been thinking about it,” Trump said.
“I think it came together early this morning, fairly early this morning,” he added. “Just wrote it up, I didn’t – we didn’t have the use of – we didn’t have access to lawyers. We just wrote it up from our hearts, right? It was written from the heart, and I think it was well-written too.”
“It was written as something that I think was very positive for the world and us,” Trump went on. “We don’t want to hurt countries that don’t need to be hurt. And they all want to negotiate.”
Trump added that the impact of today’s tariff pause surprised him, but that he thought it was good.
“We’re happy about it. I didn’t know it would have that kind of impact. The biggest increase in the history of the stock market? That’s pretty good.”
Updated
Despite Donald Trump’s 90-day pause limiting tariffs, imports from Mexico and Canada will still get taxed by as much as 25%, according to a White House backgrounder, the Associated Press reports.
The backgrounder contradicted an earlier statement by the treasury secretary, Scott Bessent, who said Mexico and Canada would also be tariffed at 10%.
Unlike the tariffs that Trump temporarily took down to 10% to give time for negotiations, the taxes on the United States’ two largest trading partners are a separate matter. Mexico and Canada are being tariffed ostensibly to stop fentanyl smuggling and illegal immigration.
Updated
Trump once again talks tariffs on pharmaceutical companies
“We’re going to put tariffs on the pharmaceutical companies, and they’re going to all want to come back,” Trump says, an idea he has raised before. “They’re going to come back – I’m not going to pay them any money.”
Updated
Trump is signing different executive orders now, and taking comments from journalists. In a response to a reporter’s question on any progress on making a deal about the ownership of TikTok, Trump says that the US will have to wait for now to see what happens with China and the deal.
Supreme court allows Trump’s firings of independent agency board members to take effect, for now
The supreme court on Wednesday allowed the Trump administration to oust two board members who oversee independent agencies, for now, the Associated Press reports.
John Roberts, the chief justice of the United States, signed an order pausing a ruling from the federal appeals court in Washington that had temporarily restored the two women to their jobs. They were separately fired from agencies that deal with labor issues, including one with a key role for federal workers as Donald Trump aims to drastically downsize the workforce.
Roberts handles emergency appeals from the nation’s capital.
Updated
Interim summary
Here’s a look at where things stand:
Global markets surged after Donald Trump announced a 90-day pause on tariffs except for China. The S&P 500 is surging 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.
Speaking to reporters on Wednesday about his tariffs policy, Trump acknowledged people were getting “a little bit afraid” and said: “I thought that people were jumping a little out line” and getting “yippy”. He added that his announcement on the 90-day pause and 125% raise on China could be “temporary.”
The World Trade Organization chief said Wednesday 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%.
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.”
China 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.
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.
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.
Updated
Trump tariff pause gives S&P 500 one of biggest days since second world war
Stocks surged to one of their biggest gains since the second world war after Donald Trump paused his tariffs against most nations except China, as investors had desperately hoped he would. Trump, though, did raise tariffs on China to 125%.
The S&P 500 soared 9.5%, though the index is still below where it was when Trump announced his sweeping set of tariffs last week. The Dow Jones industrial average flew nearly 3,000 points higher, and the Nasdaq composite jumped 12.2%.
Updated
Trump says 'China wants to make a deal' and he will exempt hard-hit companies 'instinctively'
Speaking to reporters on Wednesday about his tariffs policy, Donald Trump acknowledged people were getting “a little bit afraid” and said: “I thought that people were jumping a little out of line” and getting “yippy”.
He added that his announcement on the 90-day pause and 125% raise on China could be “temporary”.
Trump added: “China wants to make a deal … they just don’t know quite how to go about it.”
He also went on to say that “many more than 75” other countries want to make trade deals with him.
In response to whether he would consider exempting some larger companies that have been hit hard in the markets, Trump said: “We’re going to take a look at it, there are some that have been hard, there are some that by the nature of the company get hit a little bit harder.”
Upon being asked how he will determine which companies got hit the hardest, Trump said: “Just instinctively.”
Updated
The World Trade Organization 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 the US-China tariff war could reduce trade in goods between the two countries by 80%.
Okonjo-Iweala’s comments come after Trump’s comments raised tariffs on China to 125% on Wednesday.
“The escalating trade tensions between the United States and China pose a significant risk of a sharp contraction in bilateral trade. Our preliminary projections suggest that merchandise trade between these two economies could decrease by as much as 80%,” Okonjo-Iweala said in a statement.
Okonjo-Iweala added that the tariff war could “severely damage the global economic outlook”.
Okonjo-Iweala warned that the world economy risked breaking into two blocs, one centred around the United States and the other China.
“Of particular concern is the potential fragmentation of global trade along geopolitical lines. A division of the global economy into two blocs could lead to a long-term reduction in global real GDP by nearly seven percent,” she said.
She urged all WTO members “to address this challenge through cooperation and dialogue”.
Updated
Scott Bessent: latest tariff changes were in Trump's 'strategy all along'
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, [and] they responded. They have shown themselves to the world to be the bad actors, and we are willing to cooperate with our allies and with our trading partners who did not retaliate.
“It wasn’t a hard message: don’t retaliate, things will turn out well.”
Updated
Speaking on Fox Business on Wednesday, Peter Navarro, a key Trump ally and White House trade adviser, said: “This is one of the greatest days in American economic history … I think we’re going to call it the art of the reciprocal trade deal.
“All the nervous nellies who tried to undermine us consistently underestimate the power of the president.”
He added that the US will negotiate with countries “who have come to us” over the next 90 days.
Updated
The White House has confirmed Donald Trump’s statement announcing a 125% tariff on China and a 90-day pause and lowered 10% tariff for other countries, effective immediately.
The White House’s press secretary, Karoline Leavitt, said Trump had raised tariffs against China because “when you punch at the United States of America, President Trump is going to punch back harder”.
She also said the US will continue with tailor-made negotiations and that tariff level will be brought down to a universal 10% during negotiations.
US to keep 10% baseline tariffs on most countries including Mexico and Canada, says treasury secretary
The US treasury secretary, Scott Bessent, has been speaking to reporters outside the White House after Donald Trump announced he authorised a 90-day pause on tariffs on most countries and a China tariff raise to 125%.
Bessent said countries who did not retaliate against the US tariff announcement last week will be “rewarded”.
“Do not retaliate, and you will be rewarded,” he said. He noted that the tariff rate on Chinese goods has been raised “due to their insistence on escalation”.
Mexico and Canada are included in the 10% baseline tariffs, he said.
Stocks surge after Trump's tariff pause announcement
Global markets surged after Donald Trump announced a 90-day pause on tariffs except for China.
The S&P 500 is surging 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.
He also announced he has raised his tax rate on Chinese imports to 125%.
It is unclear whether any other nations besides China will face tariffs above the 10%.
Trump announces he is raising tariffs for China to 125%
Here’s the full statement by Donald Trump on his Truth Social platform, in which he has announced a 90-day pause on tariffs except for China:
Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately. At some point, hopefully in the near future, China will realize that the days of ripping off the U.S.A., and other Countries, is no longer sustainable or acceptable.
Conversely, and based on the fact that more than 75 Countries have called Representatives of the United States, including the Departments of Commerce, Treasury, and the USTR, to negotiate a solution to the subjects being discussed relative to Trade, Trade Barriers, Tariffs, Currency Manipulation, and Non Monetary Tariffs, and that these Countries have not, at my strong suggestion, retaliated in any way, shape, or form against the United States, I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
Thank you for your attention to this matter!
Updated
Trump announces 90-day pause on tariffs except for China
Donald Trump has announced a 90-day pause on tariffs effective immediately.
The US president, in a post on his Truth Social platform, wrote:
I have authorized a 90 day PAUSE, and a substantially lowered Reciprocal Tariff during this period, of 10%, also effective immediately.
Trump also said he would be raising tariffs on China to 125%, also effective immediately, citing the “lack of respect that China has shown to the world’s markets”.
Updated
Summary of the day so far
The US stock market has edged higher, led by gains in technology shares, while other markets worldwide swung sharply as Donald Trump’s trade war continues to escalate.
Large technology stocks led the gains, with Apple rising 3.3% and Nvidia up 2%. The tech sector was up 1.5%. However at noon ET, the Dow Jones industrial average fell 161.21 points, or 0.43%, to 37,484.38, the S&P 500 lost 13.71 points, or 0.28%, to 4,969.06 and the Nasdaq Composite gained 58.83 points, or 0.39%, to 15,327.41.
Here’s a recap of the latest developments:
China 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.
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.
US markets recovered later on Wednesday after the US Treasury secretary, Scott Bessent, indicated that 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 Tuesday night dinner.
The CEO of JP Morgan Chase warned that a US recession seems increasingly likely as Donald Trump’s tariffs rattle financial markets. A 2,000-point drop in the Dow “feeds on itself,” leading people to feel the pinch in their 401(k)s and pensions, prompting them to cut back, Jamie Dimon said.
The Bank of England warned that Trump’s sweeping tariffs have put global growth at risk, heaping pressure on government finances and increasing the likelihood of “severe shocks” to the financial system.
Oil prices slid to a multiyear low, dipping below the $60 per barrel mark for the first time since February 2021. The oil price slump means the Kremlin can effectively shrug off the G7’s $60 cap price cap on Russian oil exports.
British 30-year government bond yields surged to their highest since May 1998 on Wednesday, after another sharp rise in US Treasury yields driven by president Donald Trump hitting China with 104% tariffs.
The 30-year British gilt yield peaked at 5.649% at 12.22pm GMT, up more than 30 basis points on the day, before easing back to show a rise of about 18 bps at 5.53% at 3pm GMT, Reuters reported.
The rise was roughly on par with Monday’s increase, which was the biggest one-day move since shortly after former prime minister Liz Truss’ failed “mini-budget” in October 2022. Long-dated bond yields have rocketed across major economies, led by US Treasury yields. Japanese yields hit a 21-year high.
But Wednesday’s increase in British 30-year gilt yields was sharper than a 10 bps rise in equivalent US Treasuries, reminding some analysts of Britain’s fiscal vulnerabilities.
“The problem now for the UK bond market is one of liquidity and positioning,” said Kathleen Brooks, research director at brokers XTB.
On Wednesday the Bank of England, in a quarterly update on financial risks, noted that hedge funds had 61 billion pounds ($78bn) of net gilt repo borrowing last month, up from 4 billion pounds at the start of 2024.
“Use of leverage, if not properly managed, could amplify shocks and cause a jump to illiquidity,” the BoE said.
Donald Trump’s decision to impose a 104% tariff on Chinese imports into the US has spooked the financial markets. The response is entirely rational.
Over the past few decades, phoney trade wars have been commonplace. Rival nations have squared off against each other, indulged in a bit of sabre-rattling, but eventually agreed on a deal. Headlines that screamed “trade war looms” were quickly replaced by those that read “trade war averted”.
This time it’s different. The battle between the US and China prompted by Trump’s tariffs is no pretend trade war. It is the real deal – and it will have real consequences. Tariffs operate as a tax, adding to the costs of doing business and raising prices for consumers. Growth will slow and inflation rates will rise. The global economy was already growing only slowly. As things stand, it is now heading for recession.
Trump seems prepared for this, making it clear that he is ready for some short-term pain for what he thinks will be long-term gains: a revitalised US industrial base and higher exports. This also represents a shift in approach. In the past, US policymakers have tended to take fright at big falls on Wall Street and have eased policy to limit the damage.
Not this time, it appears. Or at least not yet. Trump promised to impose swingeing tariffs when he was running for president last year, but the expectation was that this was just campaign rhetoric. Instead, he has delivered on his pledges – and then some.
The EU has agreed to impose retaliatory tariffs on €21bn (£18bn) of US goods, targeting farm produce and products from Republican states, in Europe’s first act of retaliation against Donald Trump’s tariffs.
The EU plans to introduce 25% tariffs on scores of goods from almonds to yachts, with the first duties being collected from 15 April, while the bulk apply from 15 May and the remainder from 1 December.
In a statement confirming the favourable vote by EU member states, the European Commission said: “The EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy.”
It added: “These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome.”
All member states voted for the retaliation, with the exception of Hungary, whose prime minister, Viktor Orbán, is one of Trump’s strongest supporters. “Such measures would cause further damage to [the] European economy and citizens by raising prices. The only way forward is negotiations, not retaliation,” Hungary’s foreign minister, Péter Szijjártó, wrote on social media.
The EU decision came after China announced it was hitting all US goods with 84% tariffs from Thursday, up from the 34% previously announced.
JP Morgan Chase CEO Jamie Dimon warned on Wednesday that a US recession seems increasingly likely as president Donald Trump’s tariffs rattle financial markets.
Stocks and bonds plummeted in morning trading, with stock futures dropping and bond yields rising as concerns over economic stability continue to grow. Dimon, speaking on Fox Business, said a 2,000-point drop in the Dow “feeds on itself,” leading people to feel the pinch in their 401(k)s and pensions, prompting them to cut back.
“I think probably [a recession is] s a likely outcome, because markets, I mean, when you see a 2000-point decline [in the Dow Jones industrial average], it sort of feeds on itself, doesn’t it,” Dimon said on Fox Business’ “Mornings With Maria” show. “It makes you feel like you’re losing money in your 401(k), you’re losing money in your pension. You’ve got to cut back.”
With the trade war showing no signs of easing, recession fears are mounting on Wall Street as the uncertainty deepens.
Plans for a levy on the carbon produced by ships are being opposed by the US government, on the apparent basis they would “impose substantial economic burdens” and “drive inflation”.
There will be fierce debate in London this week on the future of global shipping over the proposals to charge up to $150 (£117) a tonne for the greenhouse gas emissions from ships. Those in support say the measure will be crucial to generating billions of dollars of climate finance a year to help poor countries cope with the impact of the climate crisis.
But now the US appears to have joined China, Brazil, Saudi Arabia and at least a dozen other states in opposing the levy at the International Maritime Organization negotiations. A leaked document seen by the Guardian, which has not yet been verified by the US government, purports to threaten countries with “reciprocal measures” if they agree to any levy.
The document appears to have been sent to governments at the talks to urge them to “reconsider any support for the GHG [greenhouse gas] emissions measures under consideration”.
However, sources suggest the US is still present and taking part in the talks, which are scheduled to carry on until late afternoon on Friday.
Donald Trump bragged about countries “kissing my ass” to negotiate tariffs during a dinner for Republicans on Tuesday.
The US president said:
We’re going to do much better than that this time, because this time I’m doing what I want to do with respect to the tariffs.
He added that Congress should not get involved in the negotiations because “they don’t negotiate like I negotiate”.
Oil price slump means Russian price cap is 'meaningless'
The Kremlin can effectively shrug off the G7’s price cap on Russian oil exports after the global benchmark price slumped below $60 a barrel.
The $60 cap on Russian oil exports was put in place in late 2022 - when oil traded at well over $100 a barrel - to limit the oil revenues that Moscow could put towards its war efforts in Ukraine without inflating oil market prices further by banning their exports altogether.
It effectively barred all G7 and EU nations from purchasing Russian barrels above $60 - or providing shipping, insurance, brokering, trade finance, and other support services for any deals done above the cap.
Russia was able to bypass the cap through a series of loopholes including the use of a shadow fleet of aging oil tankers to carry cargoes at the usual market rates. Experts believe it may still have cost the Kremlin around €34bn in export revenues in its first year, or roughly two months worth of earnings.
But the aggressive sell-off in the oil market over the past week over fears of a global economic recession has meant the cap is “currently meaningless”.
Clayton Seigle, a senior fellow the Center for Strategic and International Studies (CSIS) in Washington DC, told the Guardian that the G7 could now considering “tightening the screws” on the Kremlin by lowering the cap.
I personally would be in favour of lowering the cap even further. There might be a willingness within the G7 to do this to punish Moscow, especially because there are no real fears about leaving the market under-supplied.
But it’s a political decision.
The UK government was approached for comment.
While share prices on Wall Street appear to be taking a breather after four days of selling, investors are clearly asking themselves if it is worth owning US assets at all.
George Saravelos, head of foreign exchange research at Deutsche Bank, wrote in a note to clients today that he feared that disorderly markets could eventually force the Federal Reserve to step in.
He wrote:
We are witnessing a simultaneous collapse in the price of all US assets including equities, the dollar versus alternative reserve FX and the bond market. We are entering uncharted territory in the global financial system.
Saravelos argued that Trump’s hopes of reducing bilateral trade deficits are “functionally equivalent to lowering demand for US assets as well”.
He also noted that the next stage of escalation with China will be key. There could be serious problems if the US tries to use its financial power against China. Saravelos wrote:
With a 100%+ tariff on China, there is little room now left for an escalation on the trade front. The next phase risks being an outright financial war involving Chinese ownership of US assets, both on the official and private sector front. It is important to note there can be no winner to such a war: it will damage both the owner (China) and the producer (US) of those assets. The loser will be the global economy.
The Federal Reserve could cushion some of the blow, he argued, but in the end only one thing can properly stabilise markets: “a reversal in the policies of the Trump administration itself”.
Donald Trump is clearly watching the stock market closely this morning in the US.
On Truth Social, the platform he owns, he wrote:
BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!
And that was followed by:
THIS IS A GREAT TIME TO BUY!!! DJT
It appears that some investors agree, as the selling pressure has eased on stock indices. The FTSE 100 is now down 2.1% – still a fairly painful move over a single day, but less remarkable.
Oil prices have recovered somewhat, with Brent crude futures back above $60 per barrel.
In the space of a few minutes the US markets have turned around: the S&P 500 is now up by 0.4%.
The Dow Jones industrial average – a less useful gauge – is still down by 0.3%. And to round off the mixed bag, the Nasdaq is up by 1%.
US stock markets drop after Chinese tariff retaliation
US share prices fell further on Wednesday after China’s retaliation to Donald Trump’s tariffs deepened fears of a global recession.
The S&P 500, the Wall Street benchmark stock index, dropped by 0.4%, while the historic Dow Jones industrial average fell 0.7%.
However, the early downward moves were less marked than those of European or Asian markets. The tech-focused Nasdaq index actually gained 0.18% at the market open.
The FTSE 100 was still down by 2.9% on Monday afternoon, with less than two hours of trading left. The European Stoxx 600 index fell by 3.6%.
The UK’s largest investment site, Hargreaves Lansdown, says trading on its platform hit record levels this week as retail investors reacted to the tariff turmoil.
Hargreaves said Monday was the “busiest ever day” for the HL platform, both in terms of trade and the amount of money flowing through the site, with spiralling prices had actually encouraged more customers to buy stocks while they were cheap.
Around 63% of trades were put towards buying rather than selling stock on Monday, with that proportion jumping to 80% during Tuesday’s trading session.
But the level of uncertainty in the run-up to Trump’s so-called liberation day has bolstered safe havens such as gold, with net purchases of gold exchange traded funds having surged by 157% last week compared to a week earlier.
There has also been a surge in interest in owning gilts, particularly since Thursday.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
History has shown time and again that markets reward those who keep a cool head and think with a long-term horizon.
Drip feeding investments and buying when markets fall can help ride out the volatility. It means investors may be able to take advantage of lower prices and benefit during a recovery.
This can help smooth out sharp market movements over the longer-term. Most investors will be best placed to sit tight and ride out the rollercoaster.’
Donald Trump: now is “great time to move your company” to the US
Donald Trump has claimed that it is a “great time to move your company” to the US, with global stock markets reeling because of the president’s trade war.
Trump imposed a 104% tariff on China, which has responded with an 84% tariff in retaliation. That has deepened concerns that the trade war will trigger a global recession.
However, Trump has argued that the tariffs are a necessary tool to revive US manufacturing. On Wednesday morning he claimed that “record numbers” of companies are moving back to the US, despite the turmoil.
On his social network, Truth Social, he wrote:
This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing. ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!
Stock markets have suggested that investors are less impressed, with markets expected to fall for a fifth consecutive day on Wednesday.
Updated
EU to impose retaliation to US metals tariffs on 15 April
The European Commission has confirmed it secured the necessary support to impose trade countermeasures against the US, retaliating for its steel and aluminium tariffs.
The commission’s statement says that “the EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy.”
“The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial,” it added.
But it adds that the countermeasures will soon enter into force, once final checks are conmpleted, with duties set to be collected from Tuesday, 15 April.
“These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome,” it added.
US Treasury secretary Scott Bessent has been sent out this morning to try to calm financial market nerves. He said he expects the bond market to calm down.
He told Fox News that China’s retaliation was “unfortunate”, and would make them lose out.
Bessent also said that China should not try to devalue its currency to absorb some of the hit from tariffs. That came after the yuan traded onshore ended the Chinese day at its weakest level in more than 17 years, after its offshore counterpart fell to a record low overnight.
In separate remarks this morning to the American Bankers’ Association, Bessent said that the economy was in pretty good shape and very solid, despite a “little uncertainty”.
The US east coast is just about getting to work, and it appears that traders are not too pleased with what they see. The US government debt sell-off has regained momentum after China’s tariff retaliation.
The US 10-year yield, the benchmark of government borrowing costs, is back up at 4.45% – still short of the spike to 4.5% overnight, but not far off. (Bond yields move inversely to prices, so rising yields indicate that investors are selling the debt.)
The 10-year yield was significantly higher as recently as January, but what investors and central bankers will be watching in particular are any signs of disorderly trading. So far, there have been tremors, but not a sign of the financial earthquake that might need intervention from the US Federal Reserve.
But in London, the Bank of England and the UK government will be nervously watching the progress of British borrowing costs.
The cost of borrowing over 30 years has risen particularly steeply. The 30-year yield hit a high of 5.649% on Wednesday afternoon, its highest level since 1998. It was last at 5.622%, up 0.28 percentage points during the day – a noteworthy move for government debt.
There was also a notable move on the UK 10-year gilt, the benchmark for government borrowing costs (named after the gilt edges that used to adorn bond certificates). The 10-year gilt yield rose by 0.16 percentage points on Wednesday to 4.765%, its highest in a fortnight.
The FTSE 100 sell-off has accelerated: it is now down by 3.7%.
97 out of 100 FTSE 100 companies are down for the day, with pharma companies AstraZeneca and GSK the biggest fallers, both down more than 7%.
Oil company BP is down 6.5%.
Trainer retailer JD Sports, which today announced a very positive outlook, is the only company that has risen by more than 1% – it has gained 7.7%.
Trading in US stock market futures has been fairly choppy today, but after China’s retaliation it looks like selling on Wall Street is likely to resume on Wednesday.
The futures suggest that the S&P 500 is now on course for a 1.6% decline, the Nasdaq is set for a 1.3% drop, and the Dow Jones industrial average is set to drop 1.7%.
For comparison, at 9:44am BST the respective futures moves were -0.5% for the S&P 500, -0.2% for the Nasdaq, and -0.7% for the Dow Jones industrial average.
US borrowing costs have risen in the wake of China’s tariff retaliation.
The yield on the benchmark 10-year US Treasury rose above 4.42% ahead of New York’s markets opening, up 0.12 percentage points over the course of the day – although short of the peak above 4.51% earlier on Wednesday. Bond yields move inversely to prices, so rising yields indicate selling.
The yield on the US 30-year Treasury also rose above 4.9%, although that was also short of the heights of 5.02% earlier.
It is not just stock markets that have been rocked by China’s retailiation to Donald Trump’s tariffs: oil prices immediately plunged further.
Brent crude oil futures prices dropped as low as $58.47, as shown in the below chart. Bear in mind that this was the first time that a barrel had cost less than $60 since February 2021.
That has left Brent crude prices down by 5.1% today, while the price of West Texas Intermediate is down 5.4% to $56.37.
China’s announcement repeats its description of Trump’s 104% tariffs as a mistake on top of a mistake”.
It will respond with 84% tariffs on US imports from Thursday 10 April. That is an increase from the previous rate of 34%.
It said the US decision “seriously infringes on China’s legitimate rights and interests and seriously damages the rules-based multilateral trading system”, according to a translation of the announcement by Google Translate.
Updated
Stock markets have slumped further after China’s announcement of retaliatory tariffs of 84% on US imports.
The FTSE 100 is now down 3.4%. The Stoxx 600 index, which tracks the biggest European companies, is now down 4.2%.
Germany’s Dax has fallen 3.4% today, while France’s Cac 40 has dropped 3.4%.
China announces 84% tariffs on US in retaliation against Trump
China has announced new tariffs of 84% on the US, in a response to Donald Trump’s trade war that will raise fears of further escalation.
The Chinese ministry of finance said it will impose 84% tariffs on US goods from Thursday, up from the 34% previously announced, according to Reuters.
Stock markets sold off further in the wake of the announcement. More details to follow.
Updated
Donald Trump’s sweeping tariffs have put global growth at risk, the Bank of England has warned, heaping pressure on government finances and increasing the likelihood of “severe shocks” to the financial system.
The Bank’s financial policy committee (FPC) said its global risk environment had deteriorated and “uncertainty had intensified” since its last update in November, with US tariff announcements contributing to a “material increase in risks to global growth” and inflation levels.
Those concerns have knocked investor confidence, and increased the risk of a “further sharp correction” in financial markets that could cause stress for indebted companies and make it harder for governments to borrow money and refinance their debts.
The Bank warned that higher government bond yields – effectively the interest rate countries pay on their debt – would “reduce their capacity to respond to future shocks”. Government bonds, including the traditionally safe haven US treasuries, have been undergoing a dramatic sell-off since Trump announced a fresh wave of tariffs on dozens of countries overnight.
You can read the full report from the Guardian’s banking correspondent, Kalyeena Makortoff, here:
Oil prices drop below $60 a barrel for first time since February 2021
Oil prices are also slumping, as investors price in the risk of a global recession prompted by Donald Trump’s tariffs.
Brent crude oil futures prices fell by more than 4% on Wednesday, dipping below the $60 per barrel mark for the first time since February 2021. That was a decline from $75 at the start of the month.
West Texas Intermediate, the North American benchmark, also dropped by 4% to $57.
Falling oil prices are one aspect of the market turmoil that Donald Trump will welcome, as he promised cheaper energy and gasoline for cars. However, it is not clear that he planned to achieve that goal by raising the risk of a global recession.
It is also tricky to see how falling oil prices can be squared with Trump’s ambition to raise US oil production beyond record levels under Joe Biden.
Checking back in on stock markets as we approach midday: the FTSE 100 is back down by 3% today – firmly in “oof” territory.
The German Dax index is down by 3.1%, while France’s Cac 40 is down 3.1%. Italy and Spain’s benchmarks have fallen 2.9% and 2.6% respectively.
Switzerland’s SMI – with large contributions from its under-pressure pharma giants – has slumped 4.5%.
The Bank of England’s assessment of global financial risks is dominated by Donald Trump’s tariffs. It reads as a litany of warnings about increased risks to economic and financial stability.
The UK is particularly at risk from global instability because it is a small, open economy, the Bank said.
However, the British banking system is “well capitalised” to withstand any turmoil, the Bank said.
Here are some more choice excerpts:
“The global risk environment has deteriorated, and uncertainty has intensified. A range of risky asset prices, led by those denominated in US dollars, have declined sharply. The probability of adverse events, and the potential severity of their impact, has risen.”
Several risks associated with the fragmentation of global trade in goods, and financial markets, have intensified” but a “major shift in the nature and predictability of global trading arrangements could harm financial stability by depressing growth”.
“Geopolitical tensions, and risks associated with sovereign debt pressures globally, had also risen.”
Bank of England warns Trump tariffs raise risks of lower growth, higher inflation, financial instability
The Bank of England has warned that Donald Trump’s tariffs will raise risks to global growth and higher inflation.
In the record of the last meeting of its financial policy committee, led by governor Andrew Bailey, the Bank said that there was also a risk that the tariffs could worsen financial market shocks.
On the direct impacts of Trump’s tariffs, the Bank said:
This had contributed to a material increase in the risks to global growth and a weakening of the central outlook, as well as increased uncertainty over the outlook for inflation globally.
But the committee, which is set up to look for risk to financial market stability, also highlighted that risks have increased. It said:
Heightened global uncertainty and perceived higher economic risk could translate into tightened financing conditions for business, as well as impacting exit opportunities for investors in an already subdued IPO market. Such developments had the potential to interact with the vulnerabilities identified by the FPC around high leverage, valuations uncertainty, credit market interconnections and the exposure of insurers. In addition, these vulnerabilities could amplify shocks to highly indebted UK corporates or investor confidence and potentially affect UK financial stability.
Updated
Ireland’s economy would also be in the crosshairs if pharmaceuticals are hit by tariffs.
Just across the bay from the historic town of Cobh, the last port of call for the Titanic in 1912 on her ill-fated maiden voyage, lies the source of some of the world’s biggest life-savers and givers.
Sildenafil, the active ingredient in Viagra, medicinal compounds for the treatment of cancer, rheumatoid arthritis, psoriasis, Crohn’s and Parkinson’s disease, all are manufactured within two miles of the deep port of Ringaskiddy in County Cork.
On the main road from Ringaskiddy to Carrigaline, on the back road to Curraghbinny, or down towards the white beaches of Lough Beg, the mammoth windowless plants of Pfizer, Johnson & Johnson and their private wind turbines are the main attractions.
After more than 50 years, however, it is all under threat after Donald Trump accused Ireland of stealing America’s pharmaceutical industry and vowed to “force” US companies, jobs and taxes to return home.
You can read the full report here:
Donald Trump’s threat to impose tariffs on pharmaceuticals has rattled investors on Wednesday. Medicines are exempt from tariff round that started today – and have been exempt for 30 years under World Trade Organization rules.
Most governments do not want to make potentially life-saving medicines more expensive. But Donald Trump said he believes tariffs will push drugmakers to move production to the US.
Switzerland’s Roche fell 5.7%, while rival Novartis dropped 6.1%, and AstraZeneca and GSK fell to the bottom of the FTSE 100 performers on Wednesday, down 5.3% and 4.7% respectively. France’s Sanofi was down 5.3% and Germany’s Bayer down 2.3%.
Even Novo Nordisk, which has become one of the world’s biggest companies thanks to the success of weight loss drug Ozempic, has not been exempt from the chaos. Its Copenhagen-listed shares are down 4.2%.
(Thankfully for Ozempic’s millions of American users, whose insurers already have to pay thousands of dollars a year, Novo already has a factory for the injections in North Carolina.)
China’s foreign ministry called on the US to stop its ‘arrogant and bullying behaviour’ after President Donald Trump’s 104% duties on Chinese imports took effect.
Speaking to reporters at a regular media briefing, Chinese foreign ministry spokesperson Lin Jian said the US continued to impose tariffs on China “indiscriminately”.
If the US really wants to solve the problem through dialogue and negotiation, it should adopt an attitude of equality, respect and mutual benefit.
Trump’s “reciprocal” tariffs on dozens of countries began on Wednesday, including 104% duties on Chinese goods. That deepened his global trade war and triggered more widespread selling across financial markets.
US stock market futures were actually positive this morning, but they have now turned negative amid the broader market turmoil. That suggests that share prices on Wall Street could fall further when they open at 9:30am EDT (2:30pm BST).
The S&P 500 is on course for a 0.5% decline, the Nasdaq is set for a 0.2% drop, and the Dow Jones industrial average is set to drop 0.7%.
Chinese leaders to consider economic support in response to tariffs – report
How come Chinese stock market indices rose on Wednesday, when share prices everywhere else slumped? Possible government intervention is one key aspect.
Reuters reported that top leaders from the Chinese government will meet as soon as today to discuss the response to US tariffs and “to discuss measures to boost the economy and stabilise the capital markets”.
The news agency reported:
Senior officials from the State Council, several government and regulatory bodies were expected to attend the meeting, said the two sources.
Some of the measures to stimulate the world’s second-largest economy could be implemented in the coming weeks, the second source said.
The UK’s 30-year bond yield has soared to its highest level since 1998, following a steep sell-off in US government debt.
As mentioned earlier, the US Treasury market is perhaps the most crucial part of the global financial system. Anything that happens there ripples across the world, and so the US bond sell-off has been mirrored in the UK.
The yield on 30-year UK government debt rose to 5.507%, surpassing the 5.472% peak hit in January. Yields move inversely to prices, so a rising yield indicates that prices have dropped.
Higher yields on gilts – UK government bonds – will make things even more difficult for the government in Westminster, as it will raise the cost of borrowing to fund investment.
Chancellor Rachel Reeves is already struggling to find money, and further rises in borrowing costs would limit her room for manoeuvre.
EU to vote on retaliatory 25% tariffs on US exports
The EU will vote later on Wednesday on imposing retaliatory duties on €21bn of US goods, including agricultural produce, make-up, steel parts and plastics, in Europe’s first act of retaliation against Donald Trump’s tariffs.
The EU is looking at 25% tariffs on scores of goods from almonds to yachts, according to a document seen by the Guardian and first reported by Reuters. Most of the tariffs would apply from 15 May, unless blocked by a large majority of member states.
The measures are a response to the US tariffs on steel and aluminium announced by Trump in February. The EU has chosen goods that can be easily sourced from elsewhere, while some targets are intended to inflict political pain on key Republican states. The European Commission, for example, wants tariffs on US soybeans, grown abundantly in Louisiana, the home state of House of Representatives Speaker Mike Johnson.
A European Commission spokesperson said on Tuesday that the second phase of the EU’s response - retaliatory measures in response to tariffs on cars and the sweeping “reciprocal tariffs” announced on 2 April - would be presented “early next week”.
Around 70% of EU exports to the United States, goods worth €382bn, will be affected by Trump’s tariffs, a move that has rang alarm bells across the continent, amid forecasts of job losses and a hit to economic growth.
EU trade commissioner Maroš Šefčovič said on Monday the EU was “not in the business of going cent for cent or tit for tat or dollar for dollar” when it comes to retaliation on goods. EU officials acknowledge that options for retaliatory tariffs – that are relatively pain-free for Europeans – are narrowing. This week the EU dropped plans to target bourbon, after lobbying from drinks-producing nations France, Italy and Ireland, which feared their wine and spirits industries being hit by Trump’s threat of 200% counter tariffs.
As the EU runs out of options on goods, EU nations are increasingly interested in targeting US service industries, a sensitive area where the US runs a €109bn trade surplus.
A meeting of EU trade ministers on Monday revealed varying enthusiasm for the EU’s anti-coercion instrument, which would allow the bloc to adopt wide-ranging actions against a country deemed to be using trade as a weapon, such as revoking intellectual property or market access rights. Michał Baranowki, the Polish economy minister, who chaired the meeting, said “there was a sense in the room of not being trigger happy… but no one was pushing back for being soft”.
EU officials have said nothing is off the table, while urging the US to enter negotiations.
The European Commission President Ursula von der Leyen revealed on Monday that the White House had been offered a “zero-for-zero” trade deal. She went public with the offer after the billionaire businessman and Trump adviser Elon Musk mused about a free-trade zone between the EU and US over the weekend, in a sign of dissent with the administration.
The offer of zero tariffs on cars and industrial goods was first made in mid February when Šefčovič met his counterpart Howard Lutnick, but the idea dates back to a previous effort to persuade Trump to drop tariffs in 2018.
The talks have not yielded results so far, amid uncertainty over whether Trump’s tariffs are intended to raise revenues, create leverage over other countries, or to reindustrialise America.
China’s government has criticised Trump’s actions as threatening and coercive, a “mistake on top of a mistake”, and reiterated pledges of countermeasures in a white paper published on Wednesday on the country’s trade relationship with the US.
“The move will not help to solve domestic economic problems in the US, but will ultimately backfire and make the US a victim of its own misdeeds,” the white paper said. It called for mutual respect, saying:
As two major countries with different development stages and economic systems, it is normal for China and the United States to have differences and frictions in economic and trade cooperation.
The success of China and the United States is an opportunity rather than a threat to each other.
But the lengthy document then launched into pages and pages of criticisms. It accused the US of abusing trade levers to suppress China, and of failing to meet obligations under numerous agreements including the phase one trade deal signed during Trump’s first term, and of “systematically escalated economic and other forms of pressure against China”. It cited long held complaints over US criticism and sanctions of China’s human rights abuses in Xinjiang and the crackdown on Hong Kong’s pro-democracy movement, and repeated accusations that the US was using fentanyl as a pretext to launch its trade war on China.
The white paper made it clear that China is unlikely to back down in this trade war, and made reference to the last known communication between Trump and China’s leader Xi Jinping.
Trade wars produce no winners, and protectionism leads up a blind alley. The economic success of both China and the US presents shared opportunities rather than mutual threats. The US side is expected to join forces with the Chinese side to pull in the same direction pointed out by the two heads of state in their phone conversation earlier this year.
The US dollar has fallen in value on Wednesday, alongside US government debt, as investors question whether the world’s biggest economy will fall into recession.
The dollar is down by 0.7% against a trade-weighted basket of currencies on Wednesday. The euro jumped by 0.75% to $1.1041. Sterling gained 0.3% against the dollar, with one pound buying $1.2812.
The Japanese yen also strengthened by 0.6% against the dollar, with a dollar buying 145.48 yen.
Lee Hardman, a senior currency analyst at MUFG, a Japanese investment bank, said:
The unfavourable price action has cast some doubt on the safe haven status of the US government bond market and the US dollar at the time when the global trade war is intensifying.
We expect foreign exchange market volatility to remain elevated in the near-term, and continue to expect the traditional safe haven currencies of the yen and Swiss franc to outperform.
Updated
The astonishing 104% tariff imposed by Donald Trump on US imports from China is at the centre of the turmoil on global financial markets.
Trump appears to believe that China, led by Xi Jinping, will back down and offer some kind of deal. However, that may be unlikely, writes the Guardian’s senior China correspondent, Amy Hawkins:
The opening shots seem like a distant memory. Back in January, US president Donald Trump threatened to impose a tariff of 10% on Chinese imports. Less than three months later, the rate is now 104%.
China has condemned the tariffs. As well as applying its own reciprocal tariff of 34% on US imports, Beijing has been fighting a war of words.
“When challenged, we will never back down,” said China’s foreign ministry spokesperson, Lin Jian. The commerce ministry said: “China will fight to the end if the US side is bent on going down the wrong path.” Further countermeasures have been promised by Beijing.
You can read the full analysis here:
In London, only three share prices on the FTSE 100 have risen.
Among the notable fallers on Wednesday morning are pharmaceutical companies, after Donald Trump last night said that “major” tariffs on imported medicines were coming.
Anglo-Swedish AstraZeneca fell by 4.4% in early trading, while GSK, formerly known as GlaxoSmithKline, dropped by 3.3%.
“We’re going to be announcing very shortly a major tariff on pharmaceuticals,” Trump said at a dinner of the National Republican Congressional Committee.
UK and European stock markets slump as Trump tariffs take effect
The major stock market indices in London and across Europe slumped in the opening trades on Wednesday morning as Donald Trump’s tariffs took effect.
The FTSE 100 dropped by 2.2% in early trades on Wednesday, immediately undoing most of the gains on Tuesday.
Germany’s Dax index dropped by about 2.3%, while France’s Cac 40 fell by 2.4%. Spain’s Ibex index was down by 2% as well.
As what looks like another brutal trading session approaches on Europe’s stock markets, here is a quick round-up of the main market moves in Asia:
Japan’s Nikkei 225 index closed down by 3.93%. The broader Japanese Topix index fell by 3.4%.
Chinese stock markets rose, despite a 104% tariff on US imports from China, amid reports that Beijing would step in to support the market. The SSE Composite index in Shanghai rose 1.1%, while the Shenzhen SE Composite rose 2.2%.
Hong Kong’s Hang Seng index fell by 0.4%.
Australia’s S&P/ASX 200 benchmark index fell by 1.8%.
South Korea’s Kospi 200 index dropped by 1.8%.
Investors 'alarmed' over sell-off in US government bonds
Investors are sounding alarm bells over a steep sell-off in US bonds, traditionally seen as a safe haven for investors around the world, as the reaction to Donald Trump’s tariffs threatened to spread.
The cost of borrowing for the US government has risen sharply this week as investors dumped the bonds usually seen as the safest of assets during market turmoil.
The yield on the benchmark 10-year US Treasury bond rose by 0.16 percentage points on Wednesday to 4.42%, its highest since late February – and this week has seen the three biggest intraday moves since Trump was elected in November. Yields move inversely to prices, so surging yields mean falling prices as demand drops.
The move in the 30-year bond was more dramatic. The 30-year yield briefly jumped above 5% to its highest since late 2023, according to London Stock Exchange Group data. It was last trading at 4.9157%, or 0.2 percentage points higher than Tuesday.
The US Treasury market is crucial to the functioning of the global financial system, setting the “risk-free” rate against which most other assets are measured. Yet it would be hard to see anything related to Trump’s economic policies as “risk-free” at the moment.
Henry Allen, a strategist at Deutsche Bank, said the sell-off in US government debt was “alarming” in a note to clients this morning.
US Treasury markets are also experiencing an incredibly aggressive selloff as we go to press, adding to the evidence that they’re losing their traditional haven status.
So there’s no sign yet that the market is managing to successfully find a bottom, and it feels like no asset class has been spared as investors continue to price in a growing probability of a US recession.
Some investors have suggested that the higher yields may be caused by investors scrambling to access cash by selling their safe assets. The US Federal Reserve will be watching that dynamic closely, as disordered selling of US government debt would cause turmoil across financial markets.
Jack Chambers, senior rates strategist at ANZ in Sydney, said:
This is beyond fundamentals right now. This is about liquidity.
You can read more on the importance of US Treasuries to the global economy here:
It is looking like another painful day ahead for European stock markets.
Financial markets open in about 45 minutes, at 8am BST. The main European futures markets are indicating heavy falls are expected when markets open.
Futures for London’s FTSE 100 index are down by 2.7%, Germany’s Dax index futures are down by 3.6%, and France’s Cac 40 is down 3.7%.
(And it’s Jasper Jolly in London taking over our coverage.)
Summary
In case you’re just catching up with the latest upheaval in Donald Trump’s deepening global trade war, here’s a recap of today’s developments. And you can read our latest full report here.
Trump’s new wave of tariffs on dozens of economies came in force on Wednesday, including 104% levies against Chinese goods, as Washington and Beijing were locked in a high-stakes game of brinkmanship.
Rates on imports to the US from exporters like the European Union or Japan rose further at 12.01am (05.01am BST) Wednesday, after the imposition of sweeping 10% tariffs rocked the global economy since coming into force over the weekend.
China has been hardest hit by the tariffs but has shown no signs of backing down, vowing to fight a trade war “to the end” and promising countermeasures to defend its interests. China’s retaliatory tariffs of 34% on US goods are due to enter in force on Thursday.
Trump said on Tuesday his government was working on “tailored deals” with trading partners, with the White House saying it would prioritise allies like Japan and South Korea. His top trade official Jamieson Greer also told the Senate that Argentina, Vietnam and Israel were among those who had offered to reduce their tariffs.
Trump told a dinner with fellow Republicans on Tuesday night that countries were “dying” to make a deal. The US president said: “I’m telling you, these countries are calling us up kissing my ass.”
A sell-off across Asian markets resumed on Wednesday, with Japan’s Nikkei down more than 3%, Hong Kong plunging more than 3%, South Korea’s currency hitting a 16-year low and government bonds suffering heavy losses. Australian shares lost billions of dollars of value, while Taiwain stocks fell 5.8% in afternoon trading. Trillions in equity have been wiped off global bourses in the past days.
Foreign exchange markets also witnessed ructions, with the South Korean won falling to its lowest level against the dollar since 2009 this week. China’s offshore yuan also fell to an all-time low against the US dollar, as Beijing’s central bank moved to weaken the yuan on Wednesday for what Bloomberg said was the fifth day in a row. Oil prices slumped, with the West Texas Intermediate closing below $60 for the first time since April 2021.
India’s central bank cut interest rates, citing “challenging” global conditions.
The European Union has sought to cool tensions, with bloc chief Ursula von der Leyen warning against worsening the trade conflict in a call with Chinese premier Li Qiang. She stressed stability for the world’s economy, alongside “the need to avoid further escalation”, an EU readout said.
With news agencies
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Germany is at risk of another recession as a result of trade tensions sparked by the Trump tariffs, the finance minister said.
“A possible trade conflict increases the risk of recession, there is no question about that,” Joerg Kuki told the broadcaster Deutschlandfunk on Wednesday.
Already smarting from two consecutive years of recession, a third contraction in 2025 would mark a historically long down-run for Europe’s largest economy.
Reuters quoted sources as saying German economic institutes are to revise down their forecast for 2025 to just 0.1% growth, under projections that do not factor in the latest Trump tariffs.
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The opening shots seem like a distant memory. Back in January, US president Donald Trump threatened to impose a tariff of 10% on Chinese imports. Less than three months later, the rate is now 104%.
China has condemned the tariffs. As well as applying its own reciprocal tariff of 34% on US imports, Beijing has been fighting a war of words.
“When challenged, we will never back down,” China’s foreign ministry said. The commerce ministry said: “China will fight to the end if the US side is bent on going down the wrong path.” Further countermeasures have been promised by Beijing.
The tit-for-tat measures could spark fears of a race to the bottom, with ordinary people suffering as prices rise and a fears of a global recession grow. But although China’s economy has in recent years been beset by its own challenges, when it comes to tariffs specifically, Beijing is unlikely to blink first.
For the full analysis on the high-stakes game of brinkmanship between China and the US, see here:
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Asean chief urges 'boldly’ integrating region’s economies
Asean must “act boldly” to accelerate regional economic integration as sweeping US tariffs leave much of the world caught in the middle of a devastating trade war, the bloc’s chief said on Wednesday.
The 10-member Association of Southeast Asian Nations, which count on the US as their main export market, were among those hit with Donald Trump’s steepest levies.
“To remain relevant and resilient in a world where economic chaos is fast becoming the new normal, we must act boldly, decisively, and together to reaffirm Asean’s commitment to a stable, predictable and business-friendly environment,” Asean’s secretary general, Kao Kim Hourn, told an investment conference.
Agence France-Presse reports he was speaking on the eve of a meeting of Asean economic and finance ministers as well as central bank governors in the Malaysian capital of Kuala Lumpur to discuss how to respond to the US tariffs.
Asean governments have chosen not to the retaliate against Washington, preferring dialogue. But their export-oriented economies risk being hurt by a global trade war after China – another key market – imposed its own tariffs on the US.
Kao said:
Without urgent and collective action to accelerate intra-Asean economic integration and diversify our markets and partnerships, we risk ceding our place in a fractured and fast-evolving global economy.
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India central bank cuts rates
India’s central bank has cut interest rates, citing “challenging” global conditions, AFP is reporting.
Chinese social media is abuzz with the latest tariffs, as Donald Trump’s 104% duties on Chinese goods kicked in on Wednesday.
One of the top trending hashtags on Weibo was “The US begs for eggs while fighting the trade war”, while another was “Trade barriers can’t stop economic globalisation”.
Weibo users mocked the US for suffering from an egg shortage, with some accounts sharing pictures of empty egg shelves in US supermarkets.
“If you can’t even handle an egg, why are you fighting a trade war,” one user wrote.
Influential Chinese bloggers have suggested that China could restrict the import of American poultry and eggs as a countermeasure in the trade war, which would be a further blow to US farmers.
Weibo users also discussed the prospect of iPhones rocketing in price thanks to the tariffs, with several people saying that they would switch to using phones made by Chinese companies Huawei or Xiaomi.
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Nikkei and Taiwan stocks plummet as yen lifts after new tariffs
Japan’s Nikkei benchmark index has dived 5% while the yen rallied 1% as investors seek refuge as the new US tariff regime bites.
Stocks in Taiwan, meanwhile, fell 5.8% in afternoon trading, AFP is reporting.
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Indian pharmaceutical stocks fell 1.7% on Wednesday after Donald Trump reiterated plans to announce a “major” tariff on all pharmaceutical imports.
The US accounts for a third of India’s overall pharma exports.
Trump also threatened the duties on Friday, after his first set of reciprocal tariffs earlier last week exempted pharma products – a change in stance that had prompted a wild swing in pharma stocks, Reuters reports.
On the day, all 20 constituents of the pharma index were lower, with the index dragging down the benchmark Nifty 50 by about 0.52% as of 9.20am IST.
Gland Pharma, Lupin and Zydus Lifesciences were the top losers by percentage, down between 3% and 5%. Sun Pharma and Cipla, the top constituents by weight, fell 1.69% and 1.87%, respectively.
India’s pharma exports to the US mostly comprise generics, or cheaper versions of popular drugs. These currently attract almost no US levies, while India imposes about 10% tax on US pharma imports, according to industry experts.
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The US and and China are heading towards an all-out trade war while locked in a high-stakes game of brinkmanship as Donald Trump unleashed his new wave of tariffs today.
For more on that and all the key developments as the global economy is rocked again, see our full wrap here:
The new US tariffs against dozens of its trading partners include rates of 104% on China, 20% on the European Union, 26% on India and 49% on Cambodia.
They are tailored to specific countries based on a formula that has been criticised by economists that divides trade in goods deficit by twice the total value of imports.
“President Trump has a spine of steel and he will not break,” the White House press secretary, Karoline Leavitt, said on Tuesday. “And America will not break under his leadership.”
As the report by Helen Davidson and agencies says, the US president believes his policy will revive America’s lost manufacturing base by forcing companies to relocate to the US. But many business experts and economists question how quickly – if ever – this can take place, warning of higher inflation as the tariffs raise prices amid intensifying fears of a recession.
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Most countries have so far declined to impose reciprocal tariffs – China being the main exception – but today could see some retaliation from the European Union.
EU member states will vote today on a list of US goods to be subjected to retaliatory tariffs. The list of potential targets facing mainly a 25% levy ranges from almonds to yachts, via diamonds and dental floss, soya beans and steel parts. But bourbon and wine have been spared.
The full story is here:
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Trump tariffs including 104% against China come into force
Donald Trump’s new tariffs on dozens of countries have come into effect, including 104% duties on Chinese goods, deepening his global trade war.
The round of so-called “reciprocal” tariffs on imports to the US – imposed from 12.01am Eastern Time (0401 GMT) – come as the US president’s punishing levies have shaken a global trading order that has persisted for decades, raised fears of recession and driven worldwide stocks sharply downward.
The S&P closed below 5,000 for the first time in nearly a year on Tuesday and is nearing a bear market, defined as 20% below its most recent high, Reuters reports. S&P 500 companies have lost $5.8tn in stock market value since Trump unveiled the tariffs last Wednesday.
A sell-off across Asian markets resumed on Wednesday after a brief respite, with Japan’s Nikkei down over 3% and South Korea’s won currency sliding to a 16-year low. US stock futures also pointed to a fifth straight day of losses on Wall Street.
Trump nearly doubled duties on Chinese imports, which had been set at 54% last week, in response to counter-tariffs that Beijing announced last week. China has vowed to “fight to the end” over what it views as blackmail.
Trump has offered investors mixed signals about whether the tariffs will remain in the long term, describing them as “permanent” but also boasting that they are pressuring other leaders to ask for negotiations.
“We have a lot of countries coming in that want to make deals,” he said at a White House event on Tuesday afternoon. He said at a later event that he expected China to pursue an agreement as well.
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Base metal prices in China fell on Wednesday, with copper hitting an eight-month low, as the looming 104% US import tariff on Chinese goods heightened concerns about slowing growth.
The most-traded copper contract on the Shanghai futures exchange dropped 2.0% to 71,950 yuan ($9,789) per metric ton as of 0333 GMT, hovering near its lowest level since 12 August last year.
The benchmark three-month copper on the London metal exchange was down 1% to $8,570 per metric ton, Reuters reports.
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China's yuan slides to 19-month low
The yuan dipped further against the US dollar to a fresh 19-month low on Wednesday after the Chinese currency slid to a record low in offshore markets overnight.
The yuan weakened to a low of 7.3505 per dollar in the morning trading session, the lowest since September 2023, as investors fretted about the intensifying China-US trade tensions.
The offshore yuan pared losses and climbed about 0.62% to 7.3812 yuan per dollar in Asian trade, after sinking more than 1% in the previous session and hitting its weakest level on record at 7.4288 per dollar overnight, Reuters reports.
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Japan’s finance minister has said trade negotiations with the US could include discussions on foreign exchange rates.
“There has been various communication, including on exchange rates, from the US side, so currency moves could be among themes up for discussion,” Katsunobu Kato told parliament on Wednesday. “But specifics have yet to be set.”
Kato also said any discussions on exchange rates would be held between the finance chiefs of the two countries, Reuters reports.
While not confirmed, Kato is expected to visit Washington later this month when G20 finance leaders gather on the sidelines of the International Monetary Fund spring meetings. The visit opens up the chance for Kato to hold his first face-to-face meeting with US Treasury secretary Scott Bessent.
Given President Donald Trump’s focus on addressing the huge US trade deficit, some analysts say Japan may face pressure from Washington to help reverse the yen’s downtrend, which gives its exports a competitive advantage.
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Billions wiped off Australian stocks
In Australia, shares swung wildly early on Wednesday, wiping tens of billions of dollars of value from the market over concerns the world’s two largest economies are headed for a full-blown trade war.
The S&P/ASX 200 opened slightly lower, before plunging more than 2% a few minutes into the session, erasing the rebound of the previous day. By midday, the benchmark had recovered to the 7,435 point mark, representing a 1% fall for the session.
Mining companies were early casualties of the drop, with BHP shares falling more than 4% in early trading. Australia’s largest biotech company, CSL, was also down more than 4% after Donald Trump announced that a “major” pharmaceutical tariff was coming soon.
Resources companies, especially those involved in iron ore extraction, are particularly sensitive to any slowdown in global economic growth and a trade war between the US and China.
The full story is here:
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The New Zealand Reserve Bank cut interest rates on Wednesday citing US trade tariffs, one of the first central banks to respond to the economic turmoil sweeping markets worldwide.
“Recent increases in tariffs and uncertainty about global trade policy have weakened the outlook for global economic activity,” the central bank said, announcing it would lower the country’s key interest rate.
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Key event
It’s one hour until Donald Trump’s slew of new tariffs on the US’s largest trading partners are due to come into effect, despite fears of widespread global economic damage and calls to reconsider.
The US will also go ahead with imposing a 104% tariff on China from 12.01am ET (12.01pm China Standard Time) on Wednesday, the White House confirmed after Beijing did not lift its retaliatory tariffs on US goods by Trump’s Tuesday noon deadline.
The so-called reciprocal tariffs are also due to hit about 60 other countries.
The latest tariffs are higher than the 10% flat rate imposed on all global imports to the US last week and are tailored to specific nations based on a formula that has been criticised by economists.
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Will Trump’s tariffs tip the world into recession? That’s one of the big questions as the wall of levies he announced last week comes into effect today, upending decades of precedent from the world’s strongest economy – as this podcast explains.
The Guardian’s senior economics correspondent, Richard Partington, talks to Michael Safi about the dynamics of a market crash and a trade war and how together they may contribute to the onset of a global recession.
However, as he makes clear, the world is not yet in that worst-case scenario and steps can still be taken to minimise the risk.
Partington explains that even if the tariffs were reversed, decisions being made by governments and businesses have already moved the world into a new economic era – one in which China may make gains and where many workers at the bottom of shifting supply chains are likely to lose out.
You can listen here:
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Key event
South Korea has announced emergency support measures for its auto sector, seeking to reduce the blow of the Trump tariffs on a sector that has seen years of sharply rising exports to the US.
The measures include financial support for the auto industry as well as tax cuts and subsidies to boost domestic demand, while the government also vowed efforts to negotiate with the US and help expand markets, Reuters reports.
Trump has announced a 25% tariff on imported cars and light trucks starting on Thursday. Manufacturers are expected to bear some of the tariff costs in the first year but will eventually alter production and possibly cease importing certain low-volume models into the US market.
The South Korean government said in a statement:
Given the (lower) proportion of South Korean automakers’ local production in the United States, our industry is comparably at a disadvantage.
The tariff was expected to cause “significant” damage to South Korean automakers and auto parts manufacturers, though it was difficult to estimate by how much, the government said.
To help prevent any liquidity issues, the government will raise policy financing support for the auto industry to 15tn won ($10.18bn) in 2025 from the 13tn won previously planned, according to the statement.
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Speaking at a dinner for House Republicans, Donald Trump has been seeking to soothe fears about the economic impacts of his tariffs.
“Companies are pouring back into our country,” Trump said at the National Republican congressional committee dinner. “I know what the hell I’m doing. I know what I’m doing, and you know what I’m doing, too. That’s why you vote for me.”
He added that after years of countries ripping off the United States, “now it’s our turn to do the ripping”.
Vietnam’s government said it would buy more US goods including security and defence products as it seeks a last-minute delay to the huge tariffs imposed by Washington.
The south-east Asian manufacturing powerhouse counted the US as its biggest export market in the first three months of the year but its key customer has now hit it with 46% duties, Agence France-Presse reports.
Vietnam has asked Donald Trump to delay the implementation by at least 45 days to give time for talks.
The prime minister, Pham Minh Chinh, said Vietnam would “approach and negotiate with the US side to reach a bilateral agreement, moving towards a sustainable trade balance”, according to a statement published on the government’s news portal late on Monday.
It would also “continue to buy more US products that are strong and Vietnam has demand for, including products related to security and defence; promote early delivery of aircraft trade contracts”, the statement added.
Donald Trump says his administration is planning to announce a “major” tariff on pharmaceuticals “very shortly”. The president discussed the tariff at an event with the National Republican congressional committee, Reuters reports, saying such a duty would incentivize drug companies to relocate to the United States.
“We’re going to tariff our pharmaceuticals and once we do that they’re going to come rushing back into our country because we’re the big market,” he said.
“So we’re going to be announcing very shortly a major tariff on pharmaceuticals and when they hear that, they will leave China, they will leave other places because they have to – most of their product is sold here and they’re going to be opening up their plants all over our country.”
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China, Hong Kong and Taiwan stocks fall
Shares in Shanghai, Taiwan and Hong Kong fell at the open today as the US-China trade war escalated.
China’s blue-chip CSI300 Index opened down 1.2%, while the Shanghai Composite Index lost 1.1%. China’s SmallCap 1000 Index was down more than 4%, Reuters reports, following the US decision to impose 104% tariffs on Chinese goods starting later on Wednesday.
Hong Kong’s benchmark Hang Seng dropped 3.1%.
Taiwan’s share market fell 1.8% in early trade.
Chinese state holding companies continued to support the stock market by increasing share investment, while a slew of listed firms announced share buybacks.
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Shanghai’s composite index is set to open down 1.1% today, while China’s Beijing stock exchange 50 index is set to open more than 2% down, Reuters is reporting
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Here’s a broad wrap of the buffeting across markets as Asian share losses deepened after another Wall Street retreat in the face of the latest set of US tariffs.
Japan’s Nikkei 225 index initially lost nearly 4% and markets in South Korea, New Zealand and Australia also declined.
On Tuesday, the S&P 500 dropped 1.6% after wiping out an early gain of 4.1%. That took it nearly 19% below its record set in February. The Dow Jones Industrial Average dropped 0.8%, while the Nasdaq composite lost 2.1%.
The sharply higher tariffs were scheduled to kick in after midnight Eastern time in the US.
The retreat overnight and into early Wednesday in Asia followed rallies for stocks globally earlier in the day, with indexes up 6% in Tokyo, 2.5% in Paris and 1.6% in Shanghai.
The Nikkei 225 in Tokyo fell more than 3.9% before levelling off. About an hour after the market opened it was down 3.5% at 31,847.40.
South Korea’s Kospi lost 1% to 2,315.27, while the S&P/ASX 200 in Australia declined 2% to 7,359.30. Shares in New Zealand also fell.
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The Bank of Japan’s governor has said the central bank will carefully analyse how US tariffs could affect the economy in making monetary policy decisions.
“Domestic and overseas economic uncertainties have heightened due to US auto and reciprocal tariffs,” Kazuo Ueda told parliament on Wednesday.
We will continue to carefully analyse how the tariffs could affect Japan’s economy and prices through various channels.
The Bank of Japan (BOJ) exited a radical stimulus program last year and raised interest rates to 0.5% in January on the view Japan was on the cusp of sustainably achieving its 2% inflation target, Reuters reports.
Trump’s decision to impose sweeping tariffs worldwide, including on Japan, has complicated the BOJ’s plan to continue raising interest rates from still-low levels.
Ueda said the BOJ’s past decisions to raise interest rates were made with a focus on underlying inflation, which has gradually accelerated toward 2%. The decisions were also based on the view that removing excessive monetary support now would help the BOJ avoid raising rates sharply later to combat a too-high inflation rate, and ensure Japan’s economy achieves sustainable growth, he added.
When asked by a legislator to deliver stronger language committing to combat economic headwind from Trump’s tariffs, Ueda said only that there was still uncertainty about how US trade policy would unfold.
We will scrutinise developments, analyse how they affect the economy, prices and markets to come up with solid projections.
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Australian shares plunge 2%
More here from Jonathan Barrett on Australia’s stock market tumble today:
Australian shares fell by a steep 2% in the opening minutes of trading this morning, erasing yesterday’s bounce as hopes deteriorate that the world’s two largest economies will strike a trade deal.
The sharp price moves come shortly before the US is scheduled to hit China with additional tariffs, due to come into effect just after 2pm (Australian eastern standard time).
Taking into account past announcements, Chinese goods entering the US will face a 104% tariff as part of Donald Trump’s new trade regime. Analysts at IG warned on Wednesday that the Australian economy would be hit by the trade barrier, saying:
If China does dig in, tariffs on its imports to the US will rise to a staggering 104%, a dire outcome for Australia’s trade-dependent economy and a potential catalyst for another round of broader risk aversion.
Australia’s benchmark share index fell to below 7,350 points in the opening minutes of trading today, taking it back to the level it closed at on Monday, which was the worst trading day in almost five years.
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Today’s tariffs follow Trump’s 10% tariff on all imports from many countries, including Australia, which came into effect at the weekend.
US customs agents began collecting the unilateral tariff at US seaports, airports and customs warehouses on Saturday. Today’s measures are higher levies on goods from 57 larger trading partners.
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Nikkei plummets 3% as South Korean won falls
Japan’s main Nikkei index of shares fell in early trade on Wednesday as worries about a US-China trade war killed off a rebound rally on Wall Street.
South Korea’s currency, meanwhile, fell to its lowest level against the dollar since 2009, while oil prices slumped 3% in early Asian trade, AFP is reporting.
In Tokyo, the Nikkei 225 was down just over 3% and the broader Topix index was off 3.1%.
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More from Australia now: the country’s top economic and financial regulators are about to hold a snap meeting to talk through the impact of Donald Trump’s tariffs.
The high-powered meeting convened by the Australian treasurer, Jim Chalmers, will reportedly take place on Wednesday and include the heads of the central bank and the banking, business and consumer watchdogs, according to Nine media, cited by Australian Associated Press.
Arthur Sinodinos, a former Australian ambassador to the US, told a Nine TV program.
It’s a confidence-building measure with the electorate to say, ‘Look, we’re getting our best brains together to work out how we diversify our markets, how we adjust our economy, how we get ready for this’.
It’s the sort of thing you’d expect any government to do.
New modelling from Australia’s Treasury department suggests a global trade war will not drive the country’s economy into recession. But Chalmers says he is realistic about “substantial” risks to growth from the US tariffs, while also saying the country is “better placed and better prepared” than others to weather the coming storm.
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If you have ever bought a Christmas decoration, a button, an electric shaver or any other cheap manufactured product, there is a good chance it came from Yiwu, a city in east China’s Zhejiang province that is home to the world’s largest wholesale market.
Covering more than 4m square metres, tens of thousands of suppliers have booths in Yiwu International Trade City.
As the US and China exchange increasingly hysterical rhetoric and threaten ever-higher tariffs, it is vendors at places like Yiwu who are at the frontline of the new trade war. And while the sellers have reduced their exposure to the US, they fear the repercussions of a global economic shock.
Read the full story here:
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Australia’s S&P/ASX 200 index has fallen 2.1% to 7,351.20 points this morning, Reuters is reporting.
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Australian stock market set to plunge amid tariff tensions
Australian shares are poised to fall sharply today as Donald Trump presses ahead with plans to hit China with huge retaliatory tariffs.
Futures prices were pointing towards a steep 2% loss when the S&P/ASX 200 opened a short while ago, erasing yesterday’s rebound.
The anticipated price move would push the benchmark back under 7,350 points, the level it closed at on Monday after the market suffered its worst trading day in five years.
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Trump tariffs could slice developing Asia growth – report
The full implementation of US tariffs could cut developing Asia’s growth by about a third of a percentage point this year and nearly a full percentage point in 2026, the Asian Development Bank said on Wednesday.
In its Asian Development Outlook report, the ADB projected that growth in developing Asia will ease slightly to 4.9% in 2025 – the slowest pace since 2022 – and slow further to 4.7% in 2026, from 5.0% in 2024, Reuters reports.
The forecasts were finalised before the US unveiled sweeping new import tariffs last week, the ADB said at a press conference for the report’s release.
“The elephant in the room is clearly whether the U.S. tariffs will be fully implemented, which would lead to lower growth in our baseline forecast,” ADB chief economist Albert Park said.
Developing Asia, as defined by the ADB, is made up of 46 Asia-Pacific countries stretching from Georgia to Samoa – and excludes countries such as Japan, Australia and New Zealand.
Park said the eventual effects of the US tariffs remained uncertain, as their scope and timing could change due to negotiations, delays, or exemptions being granted.
On the flip side, stronger retaliation and further escalation could result in bigger impacts. Additionally, the size and speed of policy changes under the new US administration could reduce investment globally and in the region, while rising trade tensions and fragmentation would boost trade costs and disrupt global supply chains.
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Japan’s Nikkei average futures are down 3.4% in early trade, reports say.
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Here’s a quick recap of some of the other latest developments as the global upheaval from Donald Trump’s tariffs continues.
Canada’s retaliatory 25% tariffs on some American cars will go into effect at 12.01 ET tonight, the Canadian prime minister said. “President Trump caused this trade crisis – and Canada is responding with purpose and with force,” Mark Carney said in a social media post on Tuesday. The tariffs apply only to vehicles not already covered by the US-Mexico-Canada free trade agreement.
Trump dismissed criticism of tariffs at a White House event to boost US coal production, claiming the US was making $2bn a day from tariffs. “America is going to be very rich again very soon,” he said.
The Trump administration claims “the phones have been ringing off the hook” as countries seek to negotiate with the US on tariffs and trade. Nearly 70 countries have reached out looking to begin negotiations, White House press secretary Karoline Leavitt claimed. Earlier on Tuesday, Trump held a “great call” with South Korea’s acting president, Han Duck-soo, and said they discussed more than just trade issues. It was also confirmed that the Italian prime minister, Giorgia Meloni, will travel to the US next week for talks on tariffs with Trump on 17 April.
The Trump administration has made it clear it is not just interested in talking to other countries about tariffs in order to “level the playing field” for US companies trading overseas. US trade representative Jamieson Greer told Congress on Tuesday that countries must also lower their standards, tests and regulations the US sees as obstructive – for example, against beef and pork exports to Australia, shellfish to the EU, and its limited access to Japan’s agricultural market.
Elon Musk reportedly made several pushes to try to get the president to back down on his tariff agenda. His failure to get Trump to listen, however, is evidence to some observers of a growing rift between the US president and the world’s richest person. Asked about the growing insult-heavy feud between Musk and top trade adviser and tariff plan architect Peter Navarro (the latest is Musk called Navarro a “moron”), Leavitt said: “Boys will be boys.”
Trump’s billionaire adviser Elon Musk reportedly made several pushes to try to get the president to back down on his tariff agenda. His failure to get Trump to listen, however, is evidence to some observers of a growing rift between the US president and the world’s richest person. Asked about the growing insult-heavy feud between Musk and top trade adviser and tariff plan architect Peter Navarro (the latest is Musk called Navarro a “moron”), Leavitt said: “Boys will be boys.”
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Opening summary
Hello and welcome to our live business blog, with Donald Trump’s global tariffs due to take effect on Wednesday.
The US president appears poised to push on with measures against imports to the US from almost every country in the world. The US will also go ahead with imposing a staggering 104% tariff on China from 12.01am ET (12.01pm China Standard Time) on Wednesday, the White House confirmed after Beijing did not lift its retaliatory tariffs on US goods by Trump’s Tuesday noon deadline.
Trump’s tariffs are due to take effect at 2pm Australia time so Asian markets can give us some indication of how things are likely to be received.
After early rallies on global stock markets, Wall Street closed down after another session of sharp losses as investors’ hopes for US delays or concessions on tariffs ahead of a midnight ET deadline turned to despair.
The S&P 500 fell 1.6% after wiping out an early gain of 4.1%, which had it on track for its best day in years. That brought the index nearly 19% below its record set in February. The Dow Jones Industrial Average was down 683 points, or 1.8%, after giving up an earlier surge of 1,460 points. The Nasdaq composite was down 3.2%.
We’re likely to see another bumpy day on stock markets around the world. Stick with us to follow all the latest news, reaction and analysis.
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