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Britain is facing permanent tariffs of 10 per cent on exports to the US even if it succeeds in securing an economic deal with President Trump, his senior allies have said.
Ministers are increasingly pessimistic about securing an outright exemption from Trump’s tariffs despite the president’s decision to back down after market turmoil.
The UK is attempting to reduce the 25 per cent tariffs that Trump imposed on cars, steel and aluminium. Cars are Britain’s single biggest export to the US.
• Read in full: UK must strike ‘extraordinary deal’ or face permanent 10% tariffs
Calls for insider trading investigation after Trump’s post
Democratic senators have called on Congress to investigate accusations that President Trump manipulated the markets after posting on social media that it was a “great time to buy” hours before he made a dramatic U-turn on tariffs that led to huge rises in stock markets.
Adam Schiff, a senator for California, suggested Trump may have engaged in insider trading or market manipulation when he announced a 90-day pause on additional trade tariffs for all countries except China, sending share indices soaring.
Trump: EU was formed to take advantage of US
President Trump said his administration was continuing to view the EU as “one bloc” as they move toward negotiations over the tariffs. He says they’ll be negotiating as one rather than with individual countries.
“The EU is very smart but they were formed with the purpose of taking advantage of the United States,” he said.
I like Elon, Trump says
“I don’t need Elon for nothing but I happen to like him,” President Trump said.
He addressed Musk in the cabinet meeting as he praised the “fantastic job” the billionaire had done at the Department of Government Efficiency.
“He has not been treated properly,” Trump said, as he praised a Telsa car he bought from Musk as a show of support.
Baseline 10% tariff depends on trade surplus
Trump said that any reduction of the baseline tariff “depends” on the trade surplus the US has with individual countries.
Downing Street will be paying attention to his comments given that ministers are hoping to reduce the 10 per cent tariff put on UK imports.
Tariffs will return if deals aren’t struck
If the US cannot make deals with other countries, reciprocal tariffs against them will be reinstated, Trump said.
“We’ll have to see at that time,” he said when asked if there would be another pause if agreements could not be reached.
Trump brushes off China’s Hollywood snub
Trump said he had “heard of worse things” when asked about China retaliating to US tariffs by reducing the number of Hollywood films in the country’s cinemas.
The quip provoked laughter around the cabinet table.
Doge to save $150bn, claims Musk
Elon Musk told the cabinet meeting that his Doge department expected to make savings of $150 billion in the next financial year.
Musk is attending the meeting despite rumours that he is stepping back from his White House role.
US and Vietnam to begin trade talks
The US Treasury secretary Scott Bessent and Vietnamese deputy prime minister have agreed to begin formal discussions on reciprocal trade between the US and Vietnam, the Treasury has said in a statement.
The southeast Asian country was initially hit by some of the highest tariffs by Trump before they were paused yesterday.
Trump addresses tariffs at cabinet meeting
Trump is holding a cabinet meeting which is being filmed by international media.
He says yesterday was a “big day” following his decision to pause reciprocal tariffs. Trump says there will “always be transition difficulty but it was the biggest day in history in markets”.
He said his administration was trying “to get the world to treat us fairly”. “Everybody wants to come and make a deal” to reduce tariffs, Trump adds.
Why did Trump pause tariffs? Inside the critical 13 hours
President Trump appeared to wallow in the raw power of the US economy when he told an audience of Republicans on Tuesday night: “These countries are calling me up, kissing my ass … they are dying to make a deal.”
Dressed in black tie, he mimicked the plaintive appeal of a world leader imploring him, “Please, please, sir, make a deal. I’ll do anything.”
For days Trump put out the message that his tough tariff regime, the second phase of which took effect on Wednesday, was here to stay in a historic realignment of global trade with America.
Britain and Japan to ‘work closely together’
Sir Keir Starmer and his Japanese counterpart Shigeru Ishiba agreed on the need for like-minded countries to work together to lower trade barriers, Downing Street has said.
“On trade, the leaders agreed that a trade war does not benefit anyone, and that now is the time for a cool, calm and pragmatic approach,” a statement reads.
“They agreed on the importance of like-minded partners such as the UK and Japan to work closely together to lower trade barriers.”
FTSE closes on uptick
London’s FTSE 100 has closed up 3 per cent today as the index added as much as 6.3 per cent over the course of the day.
Kathleen Brooks, research director at XTB, said that yesterday’s relief rally on Wall Street had spread to Europe. But the “tailwinds from the tariff threat remain”, she added.
Leading US index drops 5%
The S&P 500 has lost 5 per cent, more than half its prior historic gain, after the White House said the US would charge China a tariff of 145 per cent.
Debt yield turmoil may have prompted pause
The former US Treasury secretary Janet Yellen said the threat of financial instability prompted by falling Treasury debt prices was likely to have influenced Trump’s decision to reverse course on tariffs yesterday.
Yellen told CNN that US Treasury debt yields rose sharply amid the tariff financial turmoil, causing investors to question their safe-haven status. Bond yields move inversely to price.
“It caused highly leveraged hedge funds that hold US treasuries to begin to sell their holdings, and that’s something that could really begin to trigger financial instability if there are massive sales of US treasuries,” Yellen said.
“So my understanding is that this is something that was an influence on President Trump in getting him to pause the reciprocal tariffs, and it’s certainly something that should be of concern.”
EU and UAE start trade talks
The EU and UAE have agreed to begin free-trade talks, the EU has said.
“Today, President von der Leyen held a cordial phone call with His Highness Sheikh Mohamed bin Zayed al-Nahyan, President of the United Arab Emirates. During their discussion, they agreed to launch negotiations on a free-trade agreement,” a statement on its website said.
“This marks a positive step forward in EU–UAE relations and, alongside the negotiation of broader strategic partnership agreements, can serve as a catalyst for stronger ties between the EU and the Gulf co-operation council.
“President von der Leyen emphasised the European Union’s strong track record of delivering high-standard trade agreements and building partnerships based on open trade and mutual benefit. In that spirit, the upcoming negotiations will focus on liberalising trade in goods, services and investment, while deepening co-operation in strategic sectors such as renewable energy, green hydrogen and critical raw materials.”
Listen: Who will blink first — Trump or Xi?
Cool reception for European beer can tariff
By Bruno Waterfield in Brussels
European brewers are not happy: the Trump reprieve does not help canned beer exports to America.
The truce does not cover America’s 25 per cent levies on steel and aluminium that came into force last month. Canned beer, including that brewed in Britain, is classified as an “aluminium derivative” in the annexe of products hit by the tariffs, such as metal wire and pipes, hitting 20 per cent of European exports by volume.
“When beer has been part of our culture on both sides of the Atlantic for hundreds of years, it is disappointing to see it downgraded to the status of ‘aluminium derivative’,” said a statement from the Brewers of Europe, a trade association representing more than 10,000 breweries across 28 European countries including Britain.
“We call on the US to remove beer for the benefit of US consumers wishing to enjoy great beers not just from the US but also from Europe.”
Tariffs ‘won’t be temporary’, says Starmer
The tariffs facing the UK are not “temporary”, the PM has said.
Sir Keir Starmer told reporters in Cambridgeshire: “My team are in contact with the president’s team every day.”
Asked if Trump “wasn’t taking his calls”, the PM said: “No, not at all. You have to understand that for the UK and the US we’re actually talking all the time.”
He added: “At the same time, I’m clear that this is a change which isn’t, in my view, temporary and therefore we’ve got to do the margins of making sure we turbocharge our own economy.”
EU in ‘meaningful negotiations’ with US
The EU trade chief Maros Sefcovic said that he had spoken to his US counterparts, the commerce secretary Howard Lutnick and the trade representative Jamieson Greer.
“Another call… as we’re set to suspend EU countermeasures and enter meaningful negotiations. Constant communication and daily updates keep us moving forward,” he said on X.
Earlier today, Brussels announced that it was suspending its retaliatory 25 per cent tariffs on US goods for 90 days after Trump’s climbdown on Wednesday.
Starmer insists UK retains advantage
Sir Keir Starmer has denied the UK’s decision not to respond harshly to President Trump’s tariffs has been wasted, with a US pause on the sweeping trade tax resulting in other nations facing the same constraints.
Trump’s decision to pause reciprocal tariffs means most nations now face a 10 per cent rate on all import goods to the US, the same as originally imposed on the UK.
Asked whether he thought not retaliating to US tariffs had resulted in an advantage, the prime minister told reporters: “I don’t think having a strong relationship with the US has given us no advantage whatsoever. We have got a very strong relationship on defence, security, intelligence sharing. No two countries are as closely aligned as ours.
“Of course we are continuing to talk to the US about how further we can mitigate the impact of the tariffs. But a trade war is in nobody’s interest and there is no business sector that is being impacted by these tariffs who is saying ‘jump in with both feet to retaliate and cause a trade war’.”
Chinese tariff stands at 145%
The US tariff rate on Chinese imports now effectively totals 145 per cent, a White House official has told CNBC.
Although Trump increased the Chinese tariff to 125 per cent on Wednesday, that comes on top of a 20 per cent fentanyl-related tariff which the US president had previously imposed on China, the official said.
UK ‘unlikely’ to win exemption from 10% tariff
Donald Trump’s 10 per cent tariff for almost all countries except China is likely to remain in place, his top economic adviser Kevin Hassett has claimed.
Speaking to American broadcaster CNBC on Thursday, the director of the White House National Economic Council said that the 10 per cent tariff was expected to remain in place — including for Britain.
“I think everybody expects the 10 per cent baseline tariff is going to be the baseline,” Hassett said. “And it is going to take some kind of extraordinary deal for the president to go below there.”
China mocks US manufacturing
Chinese social media accounts have been sharing AI-generated videos which mock President Trump and the American leadership as the trade war between Beijing and Washington escalates.
Videos show Trump, Elon Musk and JD Vance, the vice-president, working on a factory production line making trainers in a slight at the American administration’s vow to bring manufacturing jobs back to the US.
The trio are shown in overalls working alongside each other, threading laces into trainers. According to data from the American Apparel & Footwear Association, 61.9 per cent of all US shoe imports come from China.
Fortunes of Magnificent Seven tied to China
The performance of the Magnificent Seven — Apple, Microsoft, Amazon, Nvidia, Meta Platforms, Tesla and Alphabet — has varied considerably in early trading, depending on each company’s reliance on China.
Apple, which makes much of its iPhones in China, was down by 2.1 per cent. Tesla, which has a large manufacturing base in America but competes with a number of Chinese electric vehicle makers, was up by 11.9 per cent.
The biggest riser of the seven, apart from Tesla, was Microsoft, which was up by 7.1 per cent, while Nvidia dropped by 5.4 per cent.
• Inside Wall St’s crazy ride as short-sellers bet big against Trump
Amazon boss warns of price rises
Andy Jassy, the chief executive of Amazon, has said that the company will try to keep prices low but that online sellers could still pass some of the costs of tariffs on to consumers.
“We look at all the things that could impact consumers and customers,” he told CNBC. “It’s hard to know what’s really going to happen. There’s a lot of flux right now.”
Jassy added that he seen no changes in consumer behaviour since Trump announced the tariffs. Trump suspended reciprocal tariffs on most countries on Wednesday but increased tariffs on China, where many Amazon sellers keep much of their inventory.
Trump celebrates inflation dip
President Trump has taken to social media to proclaim the latest inflation figures.
“Just out: ‘INFLATION IS DOWN!!!’ he wrote on his Truth Social account. Figures released today showed American inflation had fallen faster than expected to 2.4 per cent in March, down from 2.8 per cent in the previous month, according to figures from the US Bureau of Labour Statistics.
Analysts had expected an annual rate of 2.6 per cent last month.
Bank chief questions Trump’s ‘victory’
Carsten Brzeski, global head of macro at the Dutch bank ING, has called into question President Trump’s claim of a “victory” in the US trade dispute against China.
“US President Trump has decided on a 90-day reprieve for the ‘higher reciprocal tariffs’ for countries that have not ‘retaliated’ against his announcements from last week. That is, all countries except China,” he said.
“Apparently, this shift wasn’t because of the financial market carnage we have been seeing, but Trump declaring ‘a victory’.”
Brzeski cast doubt on that framing, pointing out that two of the US’s biggest trading partners remain absent from negotiations. “Given that next to Mexico and Canada, the most important trading partners of the US, China and the EU, have not gone into any negotiations, makes this ‘victory’ look like celebrating a big party when your favourite national soccer team just won against San Marino.
“In all honesty, the current situation is not only chaotic, it’s crazy.”
Bessent to meet Argentinian president
Scott Bessent will make his first official visit abroad as US Treasury secretary on Monday to meet Javier Milei, the pro-Trump, libertarian president of Argentina.
“I look forward to our positive discussions about Argentina’s economy, and to exploring the ways our nations can further deepen our vital economic relationship,” Bessent said.
On Friday the International Monetary Fund’s executive board is expected to approve a $20 billion loan deal that will be crucial to Argentina’s ability to dig itself out of its worst economic crisis in decades.
Argentina, America’s second-largest economy, is emerging from triple-digit inflation, a recession and a dangerous slide in foreign currency reserves that remain in the red on a net basis. Milei visited Trump’s Mar-a-Lago estate earlier this month and shouted out “Make Argentina Great Again!” from the ballroom stage.
US markets open considerably lower
US markets opened considerably lower as concerns about the impact of President Trump’s escalating trade war with China grew.
The S&P 500 fell by 2.2 per cent, while the Nasdaq dropped by 2.7 per cent, and the Dow Jones Industrial average dipped by 1.7 per cent.
The drops happened despite better-than-expected inflation figures, pointing to overwhelming concern about the impact of Trump’s tariffs on China.
‘Greatest trade day will go down in history’
President Trump’s senior trade adviser, Peter Navarro, has said today “will go down in American history as the greatest trade negotiating day we have ever had”.
“We’re in a beautiful position for the next 90 days” to seek trade deals with partners, he told ABC News. More than 75 have sought to negotiate with Washington.
Earlier, Kevin Hassett, the White House economic adviser, said the US was considering offers on tariff agreements from up to 15 countries.
No 10 places hope of tariff deal on Trump’s mood change
By Steven Swinford, Political Editor
Shortly after 6pm on Wednesday night, President Trump posted a 159-word message on his Truth Social media platform that sent the world scrambling. He announced that he had authorised a 90-day pause in his tariffs, backing down in the face of relentless pressure in the bond markets.
No 10 had not been expecting it and was initially unsure about what it actually meant, since Trump had imposed a universal tariff of 10 per cent on the UK along with 25 per cent tariffs on exports of steel, aluminium and cars. Two hours later it received clarification from Trump’s administration that from the UK’s perspective nothing had changed.
The tariffs on the UK remain the same and it now finds itself in the same place as the European Union, despite pursuing a very different strategy.
While Brussels has drawn up a €20 billion package of retaliatory tariffs, the UK has refrained and instead gone out of its way not to provoke Trump. There is no evidence, as yet, that this has resulted in preferential treatment.
• Read in full: No 10 banking on Trump’s mood change to secure better tariff deal
‘Shelves at Walmart will be empty’ if trade war cotinues
An economist has warned that escalating trade tensions between the US and China could have severe consequences for global supply chains and American consumers.
John Gong, professor of economics at the University of International Business and Economics in Beijing, said “trade just cannot happen” if the punitive tariffs announced by both sides remain in place.
Speaking to BBC Radio 4’s World at One, Gong said: “I think that American consumers are going to see massive price rises, inflation. Practically all of the shelves at Walmart will be empty.”
He added that Trump saying “China needs to call first” pus Beijing in a “very awkward position”.
“You don’t talk to your opponent in a negotiation like this. I think it’s very natural that China is responding in a very strengthened way.”
Several trade deals with US ‘close to finish line’
The US is considering offers on tariff agreements from up to 15 countries and is close to deals with some of them, the White House economic adviser has said.
“USTR [United States Trade Representative] has informed us that there are maybe 15 countries now that have made explicit offers that we’re studying and considering and deciding whether they’re good enough to present the president,” Kevin Hassett said.
He said senior members of the administration would meet today to “make sure that the countries that are most important for getting this to the finish line are the countries that we bring in first”.
“There’s a big inventory of deals that are right close to the finish line,” Hassett told CNBC earlier.
France to fight for anti-hate speech act in talks with US
France will oppose attempts to water down the EU’s drive to keep hate speech and unfair practices off the internet during trade negotiations with Washington, the economy ministry has said.
The Trump administration has attacked the EU’s Digital Services Act, which is designed to stamp out illegal online content, and the Digital Markets Act, to tackle anti-competitive practices.
Washington has denounced the laws as an unjustified restriction on US tech giants such as Google and Facebook and Brussels is under pressure to include the issue in trade talks.
The French economy ministry said: “There is no question placing them in a form of negotiation. These laws concern our values, such as the protection of citizens, their data and online hatred.”
Musk is winning trade debate, Republican strategist says
Elon Musk has emerged as the victor in his public row with President Trump over tariffs, a Republican strategist has claimed, after the US president backtracked on his sweeping levies plan.
Matthew Bartlett, a Republican strategist, told Times Radio: “For now, I believe the relationship [between Musk and Trump] will continue on.
“Let’s remember Elon is on the winning end of this trade debate. Beyond that, even after his service at Doge [the Department of Government Efficiency], that relationship will continue on.
“They personally get along together, and perhaps more importantly in politics, they have a donor-client relationship. Deep pockets will always bind friendships in politics.”
The cost of the pause for the EU
President Trump has pressed pause on blanket tariffs against European goods that were worth €373 billion, hitting more than 70 per per cent of exports.
The value of EU’s paused tariffs on a list of US exports is a small change in comparison, worth €21 billion, and was in retaliation to Trump’s levies of 25 per cent on steel and aluminium that entered into force in March.
Brussels’s list had already been watered down by some €5 billion. To avoid angering Trump, American whisky and wine was taken off the list after the US president threatened a 200 per cent tariff on European alcohol.
EU duties covered a wide range of American exports including tobacco, soybeans, sweetcorn, rice, almonds, orange juice, cranberries, tobacco, iron, steel, aluminium, yachts and motorbikes and textiles.
April 15 was the day when the first round was due to come into legal force.
Meloni’s future meeting with Trump sparks row
By Tom Kington, Rome
Giorgia Meloni’s April 17 trip to see President Trump now looks set to be a less tense meeting after Trump’s backpeddling on tariffs.
However, it still managed to spark a row with France after ministers in Paris accused the Italian prime minister of acting alone — and possibly carving out a deal for Italy — just as the EU attempts to present a common front.
Francesco Lollobrigida, Italian farming minister, was quick to react to French finger pointing, arguing that no-one in Paris consulted with Rome before President Macron’s February trip to the White House.
“When Macron goes abroad it’s OK, but it’s not when others do? The truth is the French think there are first division and second division states,” he said.
It was left to a French government spokeswoman to make peace, arguing that Meloni might be going it alone but that she is ready to convey the EU’s arguments against tariffs.
Australia rejects China’s call to ‘join hands’
China’s ambassador to Australia has called for the world to “jointly resist” President Trump’s tariffs.
In an opinion piece in the Australian media, Xiao Qian said: “Under the new circumstances, China stands ready to join hands with Australia and the international community to jointly respond to the changes of the world.”
However, Anthony Albanese, Australian prime minister, swiftly rejected China’s call to “join hands”.
Speaking at a press conference today, he said Australia would “speak for ourselves”. Australia’s defence minister Richard Marles said Canberra would not be “holding China’s hand”.
Congress told to declare shares amid rumours of insider trading
The congresswoman Alexandria Ocasio-Cortez has called on members of the US Congress to disclose any share purchases they’ve made in the last 48 hours, amid rumours of insider trading.
“I’ve been hearing some interesting chatter on the floor,” Ocasio-Cortez, 35, wrote on X, adding: “Disclosure deadline is May 15th. We’re about to learn a few things.”
The 2012 Stop Trading on Congressional Knowledge Act requires members of Congress to file financial disclosures of their stock trades within 30 days. However, the penalty for a member of Congress violating the act is only $200.
Adam Schiff, the Democratic senator from California, has also called for an investigation into any possible market manipulation over the past few days.
China targets American films in trade war
China will “moderately” decrease the number of American films imported to the country, during the current trade war between the two countries.
The appetite for US films has reduced since Trump’s tariffs, the Chinese film administration said.
US films grossed about $585 million in China in 2024, fewer than 4 per cent of China’s total $17.71 billion box office.
Trump has 3 reasons for tariffs, says former Biden adviser
President Trump’s decision to pause the rollout of higher-rate tariffs for 90 days has been described as “a chaotic move” by a former adviser to the Biden administration.
Geoffrey Gertz, a senior fellow at the Centre for a New American Security, told BBC Radio 4’s Today programme that there was “a lot of uncertainty in US trade policy overall”.
• Why did Trump pause tariffs? Inside the critical 13 hours
Asked what he believes the president’s motivations are, Gertz said: “They’ve talked about different objectives in terms of raising revenue, in terms of onshoring manufacturing and also broader questions about resetting the global economic order and using tariffs as leverage to negotiate new deals with partners and allies.
“From what I can tell they are still debating between all three of those objectives, and there’s some real tension between [them].”
EU pauses retaliatory tariffs on US
By Bruno Waterfield in Brussels
The European Union has agreed to pause tariffs on US imports for 90 days.
In a post on X, Ursula von der Leyen, president of the European Commission, said: “We took note of the announcement by President Trump. We want to give negotiations a chance. While finalising the adoption of the EU countermeasures that saw strong support from our member states, we will put them on hold for 90 days.”
She added that the tariffs would come into force if “negotiations are not satisfactory”. Brussels’ countermeasures were due to come into force on April 15.
Starmer: I’m not going to pretend levies are good news
Sir Keir Starmer has said the government “won’t just sit back and hope” in response to the economic threat posed by new US tariffs, insisting Britain must “rise to the moment”.
The prime minister said: “This government is ambitious for Britain … and I’m not going to stand here and pretend that tariffs are good news. That is not true, and you wouldn’t believe me if I said it.
“But just as we’ve seen recently on defence and security across Europe, and with Ukraine, they do make one thing very clear, and that is that the world is changing, and we as a country must change with it.
“In other words, we’ve got to rise to the moment here, recognise where our future lies, renew Britain and deliver security for working people, and that’s why we’ve taken the decision to accelerate our plans to create wealth in every community, and every community is really important here.”
American stocks set to plummet today
American stock indices are set to open considerably lower when trading starts later today, thanks to concerns over Trump’s escalating trade war with China.
Nasdaq is expected to open at about 430 points, 2.3 per cent lower, while the S&P 500 is set to drop by 108 points, or by 2 per cent.
Investors are still concerned that Trump’s 125 per cent tariffs on China will damage global growth and pose a significant problem for companies like Apple, which make a significant proportion of their products in the country.
EU ‘only major democratic force’
By Tom Kington in Rome
The former Italian prime minister Mario Monti has said that President Trump’s rule by “threats, intimidation and extortion” has left the European Union as the world’s only major democratic force.
In an interview today with the Italian daily La Repubblica, Monti said: “The US retreat from guiding liberal democracies, from leading modern market economies, makes the EU the only large political and economic space not in the hands of an autocracy.
“It will be very interesting to see who draws closer to the EU: countries in the European economic zone like Norway and Iceland, but also the UK, Canada, New Zealand and Australia.”
The only thing the EU needed to do now, Monti argued, was to stop relying on the US for military defence.
Tariffs ‘to have life-threatening consequences in UK’
An MP has written to the health secretary over concerns that tariffs imposed by President Trump could impact medicine supplies across Britain.
Wendy Chamberlain, the Scottish Lib Dem deputy leader, warned of “life-threatening” consequences if the measures impact the availability of medication in the UK.
• UK bond yields fall sharply after Trump’s U-turn on tariffs
Her letters come after Wes Streeting, health secretary, warned tariffs on medication would be “another layer of challenge” for an industry already facing issues with manufacturing and distribution.
“If the tariffs impact medication supplies even more widely, it will undoubtedly lead to many more people experiencing inadequate treatment. This is simply unacceptable and could be life-threatening.
“I urge both governments to do all they can to ensure that people across the UK do not suffer as a result of Trump’s tariffs.”
US growth to contract, forecast predicts
One of the world’s largest bond traders has warned that the US economy still risks sliding into recession despite President Trump’s 90-day tariff pause.
Pimco, the $2 trillion bond trader, said that they expected “US growth to contract in the second half of the year”, with the firm’s analysts adding that they still believe the “US recession odds are 50/50”.
Pimco’s analysts said: “Assuming all of these tariffs are implemented as initially announced, we would expect the US economy to experience recession and higher inflation, at least in the short run.”
The warning comes after Goldman Sachs and JP Morgan, US investment banks, raised their implied chances of a US recession after Trump announced his original reciprocal tariff plan last week.
• Why did Trump pause tariffs? Inside the critical 13 hours
Germany’s blue chip index bounces back
By Oliver Moody, Berlin
Germany’s blue-chip share index has bounced back sharply on the news of a 90-day respite in President Trump’s tariff package, rising 8.2 per cent in early trading and recovering the losses it had previously made this week.
However, a number of German analysts have warned against excessive exuberance, noting that the European Union is still subject to a 10 per cent blanket tariff and American trade policy remains a serious source of instability.
“Is the crisis over? Absolutely not,” commented Wirtschaftswoche, one of the country’s leading business magazines.
“[Trump] is capable of anything — to weaken the dollar and bring factories and jobs back to the US. Even if he makes tactical concessions … you can no longer rely on anything.”
Gold and oil prices fluctuate
While equities have recovered much of their losses over the week, similar reversals in fortunes have so far failed to play out in commodity markets.
Gold prices have risen again, with spot prices of the precious metals up by 0.9 per cent at $3,110.69 this morning.
At the same time, oil prices have retreated with Brent crude futures down by 0.6 per cent to $65.09 a barrel.
While the price of oil did recover somewhat in the hours after Trump’s reversal, the direction of both commodities suggests investors are still concerned about a trade war between the world’s two largest economies.
Gold’s price is being driven by safe-haven demand, while oil is falling on expectations of a wider economic slowdown.
Markets ‘breathe sense of relief’
Yael Selfin, chief economist at KPMG UK, has said there is a sense of “relief” in the markets after President Trump’s decision to grant “more than 75 countries” a 90-day lower baseline tariff of 10 per cent.
“But we haven’t gone back to the levels we had previously,” she told Sky News. “Obviously, there’s a recognition that there’s still damage and quite a lot of uncertainty.”
Asked whether she believed the US president had backed down in response to market turmoil, Selfin suggested Trump may have miscalculated.
“It’s quite possible that he underestimated the extent of turmoil that the decision would unleash on markets,” she said. “We’ve seen a very sharp correction on markets, and that in itself has implications for the US economy beyond anything to do with tariffs and that is probably unintended.”
Tariff suspension ‘marks return to economic sense’
President Trump’s temporary tariff suspension represents the “beginning of a return to economic sense”, according to the governor of the Bank of France.
François Villeroy de Galhau said: “Let’s say it’s less bad news. But there are still two bad ingredients: the unpredictability, which is always the enemy of confidence and growth, and the protectionism.”
In an interview with France Inter radio, he described Trump’s trade policies as an “own goal” that would undermine growth in the US and to a lesser extent in Europe.
Villeroy de Galhau praised EU member states for keeping their “sang-froid” and their “unity” in the situation and added: “Those qualities are going to be needed during the negotiations that are going to open. There’s no need to be paralysed and to be passive in the face of what is coming. Europeans must stick together and negotiate well.”
Ireland: We need calm dialogue with US
Ireland’s tánaiste has said talks with the United States are now “likely” following President Trump’s decision to delay tariffs on several nations.
The US had previously announced a 20 per cent tariff on goods from the European Union, including Ireland, but its Treasury secretary later confirmed that only a baseline tariff of 10 per cent will remain in place.
Simon Harris said in a statement on Thursday: “It has been my consistent position, and the consistent position of the Irish government and the European Union, that we need to get into substantive, calm, measured dialogue with the United States.”
He added: “It has always been our preference that that would have happened before tariff announcements. Clearly that was not the position of the United States.”
Analysis: Should EU still retaliate after tariff pause?
By Bruno Waterfield in Brussels
Yesterday, the EU signed on a first round of retaliatory countermeasures against President Trump’s 25 per cent tariffs on steel and aluminium, due to start next week.
Given the 90-day pause of levies on European countries, will Brussels now halt the measure?
“That’s bad timing,” Trump said yesterday in the Oval Office when asked about the EU countermeasures, but Howard Lutnick, the US secretary of commerce, was conciliatory.
“Our expectation is that it will be delayed even further,” Lutnick said. Trump responded: “I’m glad they waited.”
His comments have vindicated the EU’s approach of delay, however, Europe still faces a baseline 10 per cent tariff on all other imported goods to America.
China tells US ‘to meet it halfway on trade’
China said its door is open to negotiation with America on trade tariffs and urged the US to meet it “halfway”.
“The US cause doesn’t win the support of the people and will end in failure,” China’s foreign ministry spokesman Lin Jian said.
“[Tariffs] seriously damage the rules-based multilateral trading system, and seriously impact the stability of the global economic order,” he added. “This is a blatant act that goes against the will of the world and goes against the whole world.”
Meanwhile, China’s commerce ministry spokeswoman He Yongqian urged the US to meet it “halfway”.
“The door to dialogue is open, but it must be based on mutual respect and conducted in an equal manner,” she said.
Swedish bank chief sends out danger warning
The governor of Sweden’s central bank has warned that the global economy is still in danger and investors are still rattled by the “extreme unpredictability” of the Trump administration’s trade policies.
Erik Thedeen of Riksbank said it remained unclear whether the 90-day pause on US tariffs was “bad or good”, although he was relieved at the temporary respite.
He told the public broadcaster SVT that the spike in US government bond yields showed that trust in Washington had been profoundly shaken and that the sudden moves had been “fundamentally bad for the investment climate”.
Convene allies to tackle tariffs, says Badenoch
Kemi Badenoch has urged Sir Keir Starmer to bring together key allies in the UK’s Pacific trade bloc to tackle the fallout from US tariffs.
The Conservative leader said that if she were prime minister, she would convene members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes countries such as Canada, Mexico, Australia and Japan, to coordinate a response.
Speaking on BBC Breakfast, she said: “All those countries are feeling the brunt of US tariffs. What I would be doing if I was prime minister is convening those countries to see what we can do to make life easier for the citizens of our various countries.
“It’s always about making life better for people, reducing the cost of living. That can happen.”
Spanish PM: Trump’s move opens door to negotiation
Pedro Sánchez, the Spanish prime minister, said that the decision by President Trump to pause the enforcement of his tariffs plan opened the way to possible talks.
“The measure announced by the US administration, pending the exact nuances of its implementation, seems to open the door to negotiation and thus to an agreement between countries,” he said in a speech during an official visit in Vietnam.
He remained cautious about the details, however, and criticised the imposition of tariffs “on everyone” as “an unjustified and unfair decision”.
Spain has said it will pursue closer trade ties with China in the interests of its citizens and of the EU.
Long-term government bond yields fall sharply
Long-term UK government bond yields fell sharply from an almost 30-year high today.
The yield on the 30-year bond slid by 18 basis points to 5.404 per cent, easing from two days of steep rises that pushed the yield up to its highest level since 1998. Prices and yields move inversely.
The rate on the benchmark ten-year bond dropped by five basis points to 4.744 per cent. The pound strengthened by 0.48 per cent against the dollar to $1.28 and dropped by 0.22 per cent against the euro to €1.16.
The downward move in UK bond yields came after severe selling in US sovereign debt markets pushed global bond rates up sharply this week. Analysts said that the sell-off in the US Treasury market was driven by hedge funds unwinding a $1 trillion “basis trade”, concerns about American inflation and potential foreign selling of US assets.
• Donald Trump meets an opponent he can’t face down: the bond market
Cooper: We don’t want trade war
Yvette Cooper, the home secretary, said that Trump’s climbdown reinforces the UK’s strategy of being “pragmatic” rather than getting “buffeted around from day to day”.
She told BBC Radio 4’s Today programme: “We don’t want to see a trade war and we will continue to take a calm, steady approach to this and negotiate in the UK’s interests.
“We don’t want to see a trade war. We should be reducing barriers to trade rather than increasing them. What businesses want to know is that the UK government is acting in their interests.”
Analysis: what does Trump’s pause on tariffs mean for UK?
By Steven Swinford, Political Editor
For two hours on Wednesday night No 10 wasn’t sure as it found itself attempting to decode the US president’s latest missive on social media. In the end President Trump’s administration confirmed that, for the UK at least, nothing had changed. Britain remains subject to a blanket tariff of 10 per cent and higher tariffs of 25 per cent on exports of steel, aluminium and cars.
It means that there is still as yet no evidence of preferential treatment. The UK today finds itself in the same position as the EU despite refraining from any form of retaliation.
There is optimism in Downing Street however. Trump’s climbdown signals that he is ready to do deals, and the UK hopes to be near the front of the queue. More broadly the climbdown is likely to calm the markets and see the cost of government borrowing fall. But it is also a reminder of the sheer unpredictability of Trump, and that many in the White House — let alone those in Number 10 — have no idea what he is going to do next.
Stoxx Europe 600 rises by 7 per cent
The Stoxx Europe 600 was up by 7 per cent after trading opened today as President Trump’s decision to suspend “reciprocal tariffs” for 90 days took hold.
A baseline tariff of 10 per cent on European imports to the US still remains.
Germany’s Dax rose by 7.6 per cent, with major US-focused exporters such as Siemens, Adidas and Porsche among the biggest risers.
France’s CAC 40 increased by a similar amount, with the car manufacturer Stellantis up by 12.4 per cent.
China ‘not afraid of provocation’
China’s foreign ministry spokeswoman has said her government was “not afraid of provocations”.
Mao Ning posted a video of the former Chinese Communist Party leader Mao Zedong during the Korean War telling the US that “no matter how long this war lasts we will never yield”.
The video is captioned: “We are Chinese. We are not afraid of provocations. We won’t back down.”
Last night, President Trump increased tariffs on Chinese imports from 104 per cent to 125 per cent.
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FTSE 100 soars
Both the FTSE 100 and FTSE 250 rose by more than 6 per cent as markets opened on Thursday.
It means the FTSE 100 has recovered to more than 8,000 points — up about 450 points this morning and slightly above where it was at the end of last week. It’s the biggest rally in more than five years.
The rises come after President Trump announced a 90-day pause in tariffs for trading nations, except China, restoring a measure of confidence to global markets.
• UK economy at risk of shock, warns Bank of England
UK to ‘remain steady in face of instability’
Yvette Cooper has said the government will remain “really steady” in its approach to trade policy, as global markets react to President Trump’s tariff announcement on Wednesday.
Acknowledging the current international uncertainty, the home secretary told Sky News: “We are seeing changes all the time. We are seeing quite a lot of global instability.
“We are seeing that in the economy, we are seeing it also on security, on defence issues. But I think that just comes back to the approach that we have taken — it’s the plan for change that the prime minister’s set out, maintaining that stability in the face of the different turbulences.”
EU welcomes tariff halt
Ursula von der Leyen, president of the European Commission, welcomed Trump’s pause on tariff increases as an “important step towards stabilising the global economy”.
“Clear, predictable conditions are essential for trade and supply chains to function,” Von der Leyen said in a statement.
“The European Union remains committed to constructive negotiations with the United States,” she added.
No 10 ‘coolly and calmy’ continue trade talks with US
Downing Street has insisted that Britain will continue trade talks with the United States “coolly and calmly” after President Trump announced a 90-day pause on tariffs for most countries.
While the full details of the White House’s move remain unclear, the US Treasury secretary confirmed that a baseline tariff of 10 per cent would remain in place for most nations, including the UK.
A No 10 spokeswoman said: “A trade war is in nobody’s interests. We don’t want any tariffs at all, so for jobs and livelihoods across the UK, we will coolly and calmly continue to negotiate in Britain’s interests.”
Chinese yuan devalues against the dollar
China continued the incremental devaluation of its currency.
The onshore Chinese yuan slipped to 7.33 per dollar, its weakest since 2007, after the People’s Bank of China reduced the currency fix further to 7.209. Later today, China’s top leaders are set to meet to discuss additional economic stimulus.
FTSE set to open 400 points higher
The FTSE 100 is set to open about 400 points higher. Major markets in Germany and France are expected to rise by 7.4 per cent and 8.7 per cent respectively.
Last night on Wall Street, the S&P 500 closed up 9.5 per cent — its best day since 2008 — and the Nasdaq Composite climbed more than 12 per cent, its strongest rise since 2001. Shares in Apple, Nvidia, Microsoft, Amazon, Meta and Tesla all jumped at least 10 per cent, while a heavy sell-off in US government debt eased.
Asian and Australian stocks bounce back
Shares rose sharply and a global bond sell-off has stabilised after President Trump announced a 90-day pause in tariffs for trading nations, except China.
Japan’s Nikkei 225 index increased by 8.5 per cent, South Korea’s Kospi gained 5.9 per cent and Australia’s ASX 200 rose by 4.7 per cent in a relief rally.
Yet rises were more subdued in stock markets in China. Duties on Chinese goods rose to 125 per cent and Beijing has retaliated with an 84 per cent levy on American goods. China’s SSE Composite was 1 per cent higher, while Hong Kong’s Hang Seng advanced by 2.7 per cent.
