China retaliated against President Trump’s new tariffs, adding to fears of a global trade war as the FTSE 100 suffered its worst day since the start of the Covid pandemic. Beijing accused Trump of “unilateral bullying” and raised tariffs on all US imports by 34 percentage points, matching tariffs on China announced by Trump on Wednesday.

Having lost trillions of dollars after Trump’s announcement, global stock markets continued their falls. The FTSE 100, made up of the UK’s ­biggest listed companies, was down 4.95 per cent, its worst one-day fall since March 2020.

Trump reacted to China’s decision by saying that it had “played it wrong”. He said on his platform Truth Social: “They panicked — the one thing they cannot afford to do!” He made clear that he had no intention of backing down in the face of worldwide opposition to his measures and a collapse in the financial markets, saying: “THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”

Trump imposed a rate of only 10 per cent on imports from the UK but Sir Keir Starmer hopes to reach an economic deal with the US by the end of the month in an effort to lower tariffs further. Starmer believes that, if it can get a lower tariff rate, the UK has a potential opportunity to attract investment.

Senator Ted Cruz — who fought a bitter battle with Trump for the 2016 Republican nomination — has said on his podcast that if there is a recession, next year’s US midterm elections “in all likelihood politically, would be a bloodbath”.

He added that it could “destroy jobs here at home and do real damage to the US economy if we had tariffs everywhere”.

When President Trump was asked to comment on reports that Elon Musk would step back from his role as chief hatchet man, he told reporters: “I think Elon’s great. But he also has a number of companies to run.”

Trump said he hoped that his confidant would “stay as long as possible”, but acknowledged that the world’s richest man had other business on his mind. Trump certainly does not intend to cut ties with Musk — the relationship between president and billionaire sidekick has proved far more durable than many expected and their opponents hoped.

But according to Trump’s aides, there are other reasons why the president may want to keep Musk close.

Read in full here.

President Trump personally selected the formula used to calculate his tariffs, the Washington Post reports. The formula, which is based on America’s bilateral trade deficit with each country and the total value of its exports to the US, has been widely criticised by economists.

Deliberations went deep into Tuesday night and the president only decided his strategy plan at 1pm on Wednesday, three hours before the announcement.

Trump is believed to have shifted his preference between various tariff plans. Earlier this week, he was leaning towards the flat 20 per cent rate that he had proposed on the campaign trail last year, before switching to the “reciprocal” tariff formula unveiled on Wednesday.

Economists have noted that the White House formula assumes that trade deficits reflect unfair trade practices and do not account for services, which make up much of the US economy and a key proportion of its global exports. This has the effect of making US trade relationships appear one-sided.

Warren Buffet has denied having made comments expressing support for President Trump’s economic policies.

This week Trump reposted an Instagram video in which the 94-year-old billionaire was claimed to have said: “This is why Warren Buffett just said Trump is making the best economic moves he’s seen in over 50 years.”

On Friday, Buffet’s company, Berkshire Hathaway, said: “There are reports currently circulating on social media (including Facebook and TikTok) regarding comments allegedly made by Warren E Buffett. All such reports are false.”

Jerome Powell, chairman of the Federal Reserve, has said that he does not plan to step down from his role running the US central bank before his term ends next year.

“I fully intend to serve all of my term,” Powell told an event in Arlington, Virginia. His remarks followed calls earlier from President Trump for the Fed to cut interest rates.

Klarna, the buy-now-pay-later lender, will postpone its initial public offering in the US, which had been planned to take place within the next few weeks, according to the Wall Street Journal.

The Japanese video game company Nintendo said it would delay pre-orders in the US for the Switch 2, its long-awaiting successor to the Switch console.

Paul Franks, an entertainment expert at Coutts Bank, told Sky News that firms involved in tech hardware will want to “keep an eye” on tariffs because so much manufacturing relies on complex international supply chains

Sir Keir Starmer spoke to Anthony Albanese, the Australian prime minister, and Giorgia Meloni, the Italian prime minister, about the approach to US tariffs, saying they agreed an “all-out trade war would be extremely damaging”.

In separate calls, the British leader said it had been “clear for a long time that like-minded countries must maintain strong relationships and dialogue to ensure our mutual security and maintain economic stability”, a spokesman said.

“They all agreed that an all-out trade war would be extremely damaging and is in nobody’s interests, while agreeing to keep in close contact in the coming days.”

Cambodia’s commerce minister has offered to reduce tariffs on US goods because President Trump’s 49 per cent levy on Cambodian imports threatens its clothing industry — and the economy is already fragile.

Cham Nimul extended “her sincere appreciation to the US government” in a letter addressed to Jamieson Greer, the US trade representative. She wrote: “In spirits of strengthening our bilateral trade relations, Cambodia is committed to promote US based product imports with an immediate reduction of 19 product categories from our maximum 35 per cent tariff bound rate to 5 per cent applied tariff rate.”

Trump said on Thursday that he was open to negotiating cutting some levies “if somebody said that we’re going to give you something that’s so phenomenal”.

Trump loyalists have been sent out again to defend the president’s policy. “It’s going to work out. This is the only way we can reset our country [so] that the American people can eventually start getting money … back from the countries that have taken advantage,” Tommy Tuberville, an Alabama senator, told the conservative podcaster Benny Johnson.

He said: “We built the Middle East and Asia and India and Europe. We built it all on the backs of the American taxpayers. Now is the time for these people to come back to the party and bring gifts and things to us.”

Other Republicans in Congress, however, are openly voicing alarm at the impact of a prolonged trade war on their constituents.

Ron Johnson, a Wisconsin senator, told Fox Business: “I’m certainly concerned about what’s happening right now on the markets, and I hope the administration is looking at it as well. What’s also indisputable is the markets are down about 8 per cent in just two days, and I’m getting all kinds of reaction from businesses, farmers in Wisconsin that are highly concerned about what’s happening.”

Among western European nations, it is Italy that likes President Trump most, according to a YouGov poll. Twenty-one per cent support him, against 70 per cent who have an unfavourable opinion.

Germany has the second-highest number of Trump supporters: 18 per cent view him favourably against 77 per cent who do not. In France, 17 per cent have a positive opinion of him.

In Britain, 16 per cent like him and 80 per cent do not.

The Danes regard Trump with the highest disdain. Only 5 per cent have a favourable opinion of Trump and 94 per cent do not.

The FTSE 100 index ended the day down 4.95%, falling 419.76 points to 8,054.98, the biggest daily fall it has suffered since the start of the Covid-19 pandemic.

Markets have fallen sharply across the world

President Trump has called on Jerome Powell, chairman of the US Federal Reserve, to cut interest rates.

“This would be a PERFECT time for Fed Chairman Jerome Powell to cut Interest Rates. He is always ‘late,’ but he could now change his image, and quickly,” Trump posted on Truth Social, arguing that inflation and energy prices were down since he took office.

“A BIG WIN for America. CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” he added.

Powell said it was too soon to consider a change in monetary policy. “We face a highly uncertain outlook with elevated risks of both higher unemployment and higher inflation,” he said.

The price of an iPhone could hit $2,300 if Apple chooses to pass on the cost of President Trump’s global trade tariffs.

Most iPhones are still made in China, which was hit with a 54 per cent tariff under the new regime, forcing the American technology company to choose whether to absorb the added cost or to make consumers shoulder some, or all, of the burden.

If Apple chooses to pass through the tariff impact entirely, the price of the iPhone could rise by 43 per cent, according to an analysis by Rosenblatt Securities, the US investment bank.

Read in full here.

In another social media post from his golf club in Florida, President Trump announced that Vietnam would eliminate its tariffs on US imports.

“Just had a very productive call with To Lam, General Secretary of the Communist Party of Vietnam, who told me that Vietnam wants to cut their Tariffs down to ZERO if they are able to make an agreement with the US,” Trump said. “I thanked him on behalf of our Country, and said I look forward to a meeting in the near future.”

Trump had said he would impose a massive 45 per cent duty on imports from Vietnam, threatening to derail the country’s manufacturing sector. Vietnam has boomed as western retailers looking for low-cost mass production facilities turned away from China.

Israel is in talks with the US, its principal ally, to reduce tariffs after it was hit by a levy of 17 per cent.

Bezalel Smotrich, the finance minister, said on X: “The Ministry of Finance is maintaining an ongoing dialogue with the US administration with the aim of reducing the scope of the tariffs and reducing their impact on Israeli industry.”

Smotrich was criticised earlier this week when Israel lifted its own duties on US goods. Vladimir Beliak, a centrist member of the Knesset, said: “Smotrich rushed to remove all tariffs on imports from the US to Israel, and in response received 17 per cent tariffs on imports of goods from Israel to the US. Genius.”

Tore Hattrem, Norway’s ambassador to the UK, told Times Radio that the world needed to learn from the mistakes of the 1930s and avoid a “process of escalation”.

He said: “It’s important that those who believe in free trade come together to try to preserve the integrity of the system. We’ve already seen [with] China, you can have an escalation of increases, which can be very, very bad for the trading system, for the economy. The markets are not reacting very positively to this.

“We have to learn from the mistakes of the 1930s, where you saw that the process of escalation, of increases, which really hurt the economies at that time and led to mass unemployment, both in Europe and particularly in North America. So I hope there are sufficient experiences among the countries that we must do whatever we can to avoid this.”

As leaders around the world scramble to deal with the economic fallout from President Trump’s tariffs, the man himself was playing golf in Florida

Trump arrived at one of his resorts, Trump International Golf Club West Palm Beach, just before 10am.

Trump supporters gesture to passing motorists as they wait for the president

ALEX BRANDON/AP

Trump waves back

ALEX BRANDON/AP

His motorcade arrives at the Trump International Golf Club

ALEX BRANDON/AP

The Nasdaq stock market has officially entered bear territory, defined as an index which falls by 20 per cent or more from a recent high.

Nasdaq is a tech-heavy index. Tech companies rely on trade and manufacturing in China, so this sector has taken a significant knock from Trump’s 34 per cent on Chinese goods — and Beijing’s retaliatory 34 per cent levy on US goods.

Telsa, the electric vehicle company owned by Elon Musk, President Trump’s ally, was down almost 4 per cent in early trading.

Jeremy Hunt, the former chancellor, has praised Sir Keir Starmer for staying “very calm” in the face of new US tariffs, especially as no amount of retaliation would “make Donald Trump sweat”.

Speaking to Times Radio, Hunt said the prime minister had “done the right thing”, diplomatically speaking, which was “to be very calm, to avoid antagonising the White House”.

“But I really hope that he is not thinking in any way of retaliating, because, let’s be clear, goods exports from the UK to the US, the things that are going to be affected by these 10 per cent tariffs, they account for about 0.3 per cent of US GDP.

“So any retaliation from the UK is not going to make Donald Trump sweat.”

If his successor, Rachel Reeves, did not put up taxes, the UK could be a “haven of stability in a very unstable world”, Hunt said.

The New York Stock exchanged has just opened with US stocks falling once again.

The S&P 500, the largest stock index dropped 2.7 per cent on opening, while the tech-heavy Nasdaq fell by close to 3 per cent.

Traders at the New York Stock Exchange have had a turbulent few days

SETH WENIG/AP

Morgan Stanley fell by 6.1 per cent, JP Morgan was down 5 per cent on opening, while Bank of America dropped by 4.3 per cent.

President Trump has posted again on Truth Social, and said: “CHINA PLAYED IT WRONG, THEY PANICKED — THE ONE THING THEY CANNOT AFFORD TO DO!”

Earlier this morning, China imposed a 34 per cent tariff on all US goods entering the country.

Beijing’s commerce ministry also confirmed it had filed a lawsuit with the World Trade Organisation as China accused Trump of “unilateral bullying” trade partners

The president also claimed that his economic strategy was “already working” after a monthly government report found that US employers added 228,000 jobs in March.

“GREAT JOB NUMBERS, FAR BETTER THAN EXPECTED. IT’S ALREADY WORKING. HANG TOUGH, WE CAN’T LOSE!!!” President Trump posted on Truth Social.

Recruitment picked up unexpectedly sharply last month, despite the uncertainty around the president’s tariff plan and sweeping layoffs across the federal government. Unemployment ticked up to 4.2 per cent from 4.1 per cent, however.

It remains to be seen, however, how Trump’s new tariffs will affect consumer prices, spending and, in turn, the labour market.

With fewer migrants entering the US under Trump’s hardline migration policies, the pool of available workers may also contract, leaving the US with more sluggish job growth — even if unemployment rates remain low.

Marco Rubio, the US secretary of state, put market turbulence down to countries “adjusting to the new rules”, and told NBC News that markets were “reacting to a dramatic change in the global order, in terms of trade”.

JACQUELYN MARTIN/AFP

“They just need to know what the rules are. Once they know what the rules are, they will adjust to those rules,” he added.

Rubio said President Trump’s tariffs would bring the US “back to a time when we were a country that can make things” and “provide jobs for Americans”.

“The president rightly has concluded that the current status of global trade is bad for America and good for a bunch of other people. And he’s going to reset it, and he’s absolutely right to do it,” he added.

President Trump had earlier promoted a social media post that claimed he deliberately intended to crash the markets. On his official Truth Social account, the president highlighted a video that claimed “Trump is playing chess while everyone else is playing checkers”.

The video argued that it was in middle-class Americans’ interests to “crash the stock market” and claimed that tariffs would force foreign companies to invest in the US and farmers to sell more produce within the US and drive down grocery prices.

Adding that “94 per cent of all stocks are owned by only 8 per cent of Americans”, the video apparently produced by a TikTok user, then said: “Trump is taking from the rich short-term and handing to the middle class through lower prices.”

Most economists, however, have predicted that Trump’s imposition of tariffs will increase prices for US consumers, not reduce them.

President Trump has promised investors that it is a great time to come to the US, despite the turbulence in world markets following his announcement of sweeping tariffs on foreign exports.

On Truth Social, Trump wrote: “TO THE MANY INVESTORS COMING INTO THE UNITED STATES AND INVESTING MASSIVE AMOUNTS OF MONEY, MY POLICIES WILL NEVER CHANGE. THIS IS A GREAT TIME TO GET RICH, RICHER THAN EVER BEFORE!!!”

President Trump, driven by his son Eric, at the LIV Golf Miami tournament on Thursday

ALEX BRANDON/AP

On Thursday, Trump had predicted that the markets were going to “boom” in response to his policy announcement.

Signing a landmark trade deal with Latin America’s Mercosur bloc would be a “massive opportunity” for the EU, according to a spokesperson for the bloc, after President Trump’s tariffs triggered widespread fears of economic protectionism.

“We will be investing a lot of time and energy with member states to finalise the deal,” the EU spokesperson added.

The trade deal has been in the works for 25 years and has frequently been blocked by France over fears it could unfairly penalise French farmers. The agreement with Mercosur — which includes Brazil, Argentina, Uruguay, Paraguay, Venezuela (although it has been suspended since December 2016) and Bolivia — could unlock billions for the European economy by reducing tariffs on a range of EU exports.

In a sign that Paris may be willing to wave through the agreement, France held a meeting with ten EU countries on Thursday to discuss a possible way forward.

President Trump’s tariffs are expected to loom large over South Korea’s snap elections, due within the next 60 days, after the country’s Constitutional Court ousted impeached President Yoon this morning.

“For the next two months, Seoul will not be able to properly respond to Trumps fast-paced decisions, let alone co-ordinate with Washington on key foreign policy challenges, which could impact South Korea’s national security and economic security in significant ways,” Duyeon Kim, of the Center for a New American Security, told Reuters.

Shoring up growth is a key concern for any winning candidate who will need to respond effectively to Trump’s new 25 per cent reciprocal tariffs on South Korea.

Kweon Seong-dong, the floor leader of the ruling People Power Party, said: “Now, with the global tariff war taking place outside, our economy is in an emergency state, and the people’s economy is in a serious situation,” he said. Meanwhile, Lee Jae-myung, leader of the main opposition Democratic Party, vowed to “rebuild” the economy.

Sir Keir Starmer will be engaging with international leaders over the weekend amongst the fall out from President Trump’s tariffs.

A No 10 spokesman said: “We’ll be engaging with international leaders over the weekend. The need for engagement with international leaders is clear. It is a changing, shifting global economic landscape.”

Tariffs of 42 per cent on the Falkland Islands could be the “biggest threat since Argentina’s invasion”, Sir Ed Davey has said.

Calling for Sir Keir Starmer to meet with the Falklands governor, the Lib Dem leader said that Trump had “arbitrarily decided to hit Falklanders with some of his highest tariffs in an outrageous act of aggression that cannot be allowed to stand”.

HOUSE OF COMMONS/PA

Roger Spink, a Falklands legislative assembly member, told the Financial Times that the Falklands “have no tariffs on any goods from around the world, other than tobacco and alcohol” but they do have a trade imbalance with the US thanks to their fish exports.

He said the tariffs would have a “significant impact” on the fishing industry. The Falklands has an independent trade policy but it is “closely liaising with the UK government”, he added.

Mark Rutte, the secretary-general for Nato, evaded questions on tariffs after foreign ministers gathered for a meeting in Brussels.

Speaking from the Belgium capital, Rutte said the defence alliance was “laser focused on making sure that we keep Nato territories safe”, when asked about President Trump’s tariffs.

Pressed on if the measures would push up inflation and, therefore, affect members’ defence budgets, Rutte said: “That is for national politics and politicians to have to navigate and that’s what they are doing. I don’t think I’m helping this alliance by commenting on something which is not really part of alliance policy, and that is to make sure that we can defend ourselves.”

The chancellor has said the government is “determined to get the best deal we can” with the US after President Trump slapped 10 per cent tariffs on goods from the UK.

“Well, of course, we don’t want to see tariffs on UK exports, and we’re working hard as a government in discussion with our counterparts in the US to represent the British national interest and support British jobs and British industry,” Rachel Reeves said on Friday.

“Those conversations are ongoing at the moment, but we’re determined to get the best deal we can for our country.”

Rahcel Reeves, the chancellor, during a visit to Ronnie Scott’s in London on Friday

JONATHAN BRADY/GETTY IMAGES

She would not give a time frame for when she expected those discussions to bear fruit. “I’m not going to give a running commentary on those discussions. They’ve been ongoing since our prime minister Keir Starmer had a successful visit to the White House to meet President Trump just a few weeks ago. Those conversations are ongoing.

“We want to do everything in our power, and we’ll continue to do everything in our power to get the best possible deal for British industry, working closely with them to protect prosperity and jobs here in the UK.”

China has accused President Trump of “unilateral bullying” trade partners as he risked destabilising the economic world order.

After announcing its own set of retaliatory tariffs earlier this morning, China said in a statement that the set of levies “seriously violates World Trade Organisation rules” while also “seriously [undermining] the rules-based multilateral trading system and international economic and trade order”.

“It is a typical unilateral bullying practice that endangers the stability of the global economic and trade order. China firmly opposes this,” the statement added.

“China has always been a staunch defender of the international economic and trade order and a staunch supporter of the multilateral trading system. We urge the United States to immediately correct its wrong practices and cancel its unilateral tariff measures.”

Beijing’s commerce ministry confirmed it had filed a lawsuit with the WTO.

Downing Street declined to back President Trump’s claim that Sir Keir Starmer is “very happy” with Britain’s tariff treatment.

Asked whether it was right to say the prime minister was pleased, a No 10 spokesman said: “I think you have the business secretary’s words … we’re disappointed by the tariffs that have been brought in.

“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally, but both the prime minister and the business secretary have been very clear over the last 24 hours that we will continue to act in the best interests of the UK, and we’re prepared to do so.”

Dmitry Peskov, the Kremlin spokesman, said the tariffs were unlikely to be in Russia’s favour

YURI KOCHETKOV/AFP/GETTY IMAGES

The Kremlin has said the “turmoil” in international markets as a result of President Trump’s tariffs is not to Russia’s benefit.

“We can see that the global economy’s response to these decisions has been quite emotional. We can also see a rather high level of turbulence on global markets,” Dmitry Peskov, President Putin’s spokesman, told reporters. “The global economy is in turmoil. We are hearing quite unfavourable forecasts of various economists, including those internationally acclaimed, and they are pessimistic about the latest news.”

Trump’s tariffs were “unlikely to be in [Russia’s] favour”, Peskov added. “For obvious reasons, Russia was not put on the list, as our trade with the United States is practically non-existent in any tangible numbers. In fact, we have no trade and economic relations at this stage.

“However, we should be careful in the midst of the storm and minimise negative implications for our economy,” Peskov added.

Taiwan’s government announced at least $8.74 billion (£6.7 billion) in financial help for companies dealing with the impact of US tariffs.

Although semiconductors, a major Taiwanese export, were excluded from President Trump’s set of tariffs, Taiwan is still facing a 32 per cent duty on all its other products entering the US. It has not announced any retaliatory tariffs.

The East Asian island will be likely to tread carefully so as to not antagonise the US, its most important international backer in its opposition to China, which claims sovereignty over the country.

Russia was conspicuously missing from President Trump’s list of tariffs, as we reported yesterday. Its omission came shortly after Kirill Dmitriev, the head of Russia’s sovereign wealth fund, met in Washington with Steve Witkoff, the White House envoy.

A US-educated former Goldman Sachs investment banker, Dmitriev was also a top negotiator at US-Russia talks in Saudi Arabia on Ukraine. His visit was the first time a senior Russian official had held talks in the United States since Russia’s invasion in 2022.

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“We note a positive dynamic in our relations,” Dmitriev said, after meeting Witkoff. He said the talks had covered a wide range of topics, from rare metals, co-operation in the Arctic, flights to Mars and restoring direct US-Russia air links.

The White House said that Russia was not on the list because existing sanctions against Moscow “preclude any meaningful trade”. However, despite sanctions, Russia still exported about $3 billion worth of goods.The Russian exports are also significantly higher than the value of export from countries that were included on Trump’s list, such as Laos and Fiji.

Beijing has also announced controls on exports of medium and heavy rare earths, including samarium, gadolinium, terbium, dysprosium, lutetium, scandium and yttrium, to the United States which will begin on April 4.

“The purpose of the Chinese government’s implementation of export controls on relevant items in accordance with the law is to better safeguard national security and interests, and to fulfil international obligations such as non-proliferation,” the Commerce Ministry said in a statement.

It also added 11 entities to the “unreliable entity” list, which allowed Beijing to take punitive actions against foreign entities, as part of its response to the tariffs announced by President Trump.

The majority of US adults believe tariffs will hurt the average American, a poll found.

A total of 57 per cent said that raising tariffs would hurt the average American, while 19 per cent said they would help them, according to the YouGov poll. The pollster asked a representative sample of 3,631 adults in the US.

Stock market losses in the UK and Europe accelerated after China retaliated with an extra 34 per cent tariff on all US goods, increasing anxiety about a trade war.

The FTSE 100 dropped 3.5 per cent, or 299 points, to 8,171.63 as traders fled to the safety of government bonds. Germany’s DAX fell 5 per cent and France’s CAC was down 4.2 per cent. Italy’s FTSE MIB was the biggest faller, losing nearly 7 per cent of its value — the eurozone’s third-largest economy is heavily exposed to US tariffs through its goods exports.

Investors chose the relative safety of government bonds, driving down yields in the UK and the eurozone. The bond rally reflects fears that the world’s largest economy will be plunged into a downturn by tariffs that risk raising inflation and impinging on economic growth.

China’s finance ministry said that it will impose additional tariffs of 34 per cent on all US goods from April 10, as a countermeasure to the tariffs imposed by President Trump.

The Trump administration claimed China, its largest trading partner, charges 67 per cent tariffs to the US. China announced that, in return, it will charge 34 per cent. The tariffs were on top of earlier 20 per cent tariffs, which Trump officials said created a total tariff of 54 per cent.

China’s CSI 300 fell by 0.59 per cent after the measures were announced.

Agreeing to abolish the digital services tax for a US trade deal would be like paying off a bully, a former British ambassador to the US has said.

Watering down the 2 per cent levy, which is almost exclusively paid by Silicon Valley giants, is reportedly being considered. President Trump has called the tax a form of “extortion”.

Lord Darroch of Kew told LBC: “I think it is difficult to agree to abolish the digital tax because you are essentially saying to someone who is bullying you, ‘I am going to pay you to stop’ and the risk there is they come back in six months time and say ‘we would like some more money now please’.”

He added that its “not going to be straightforward or even likely a deal will come”.

South Africa’s foreign minister said on Friday that tariffs announced by President Trump this week had effectively nullified the benefits that sub-Saharan African countries enjoy under the African Growth and Opportunity Act.

“The sweeping tariff measures will affect several sectors of our economy, including automotive industry, agriculture, processed food and beverage, chemical, metals and other segments of manufacturing, with implications for jobs and growth,” Ronald Lamola said.

The rand fell on Friday as investors worried about the impact of Trump’s sweeping tariffs and the future of South Africa‘s coalition government.

After the 1929 Wall Street crash, the phrase “When America sneezes, the world catches a cold” was coined. President Trump’s upending of the global trade order is more likely to cause a bad case of pneumonia.

The sum total of Trump’s swathe of taxes on imports will push the US’s effective tariff rate up to about 22 per cent, the highest level since before the First World War.

The president’s protectionist turn will constrain the global economy. BNP Paribas, the French investment bank, warned of a “negative shock for global growth” and a “material” risk of recessions occurring everywhere.

• Read in full: The new tariffs mean tearing up economic forecasts everywhere

President Trump has taken US economic policy back nearly a century with the “return of protectionism”, David Lammy has warned. Lammy’s comments were the most overtly critical so far of Trump’s decision to impose global tariffs that have sent stock markets sliding.

David Lammy at the North Atlantic Council meeting at Nato headquarters in Brussels, Belgium

WIKTOR DABKOWSKI /REX

Speaking in Brussels during a Nato summit, the foreign secretary said: “The United Kingdom, like France, is a great maritime nation. We are a nation that believes in open trade and I regret the return to protectionism in the United States, something that we’ve not seen for nearly a century.

“We have been absolutely clear that all options are on the table as we ensure the national interests of the British people, who will be very concerned at this time about how this affects the bottom line for them and their economic welfare.

“We will put their national interest first, and it’s in their national interests to be negotiating with the United States an economic agreement at this time, but keeping all options on the table.”

The UK should look to the rest of the world in response to US tariffs, a former chief economist at Goldman Sachs and treasury minister has suggested.

Jim O’Neill told the Today programme that the UK should discuss lowering trade barriers with other G7 countries.

“The most important thing is to try to more seriously pursue the obvious things elsewhere in the world that would be to our benefit — I’d include China and India in that too,” he said.

O’Neill added that it is “in the bounds of feasibility” for other big economies to restructure and stop their “addiction to the US consumer”.

JD Vance, the US vice-president, will visit Italy just before Easter, giving the Italian prime minister Giorgia Meloni a chance to argue for lower tariffs and rebuild her role as a bridge between the US and Europe.

The visit was confirmed by Antonio Tajani, the Italian foreign minister, who said it was “obvious” that tariffs would be on the agenda.

An Italian government source told The Times the date of Vance’s trip was not yet confirmed, although Italian media has reported April 18-20 as likely, with a meeting with Meloni on April 19 — evidence of the Italian leader’s close ties to the Trump administration.

• Read in full: Italy’s food and wine producers clamour for discount on Trump’s 20 per cent tariffs

Britain may no longer be a manufacturing hub but it still managed to export more than £182 billion of goods to the US over the past year. Most of those exports are now going to be subject to 10 per cent tariffs, although there will be some exemptions and some higher rates.

The tariff is not paid directly by the British manufacturer but by the importer in America, who will have to pay 10 per cent of the value of the goods imported to the US custom authorities. However, the importer recovers this cost by increasing the price of the items when it sells them to retailers and distributors, who ultimately pass on the cost to shoppers.

In effect therefore, the cost of the tariff will be borne by American consumers but British companies will suffer because it means their goods will be more expensive and demand for them will probably fall. Here we look at the likely impact sector by sector.

• Read in full: The tariffs threaten sectors from pharmaceuticals to Scotch whisky

Eric Lombard, the French finance minister, opened the door to letting the deficit reduction target slip this year — ruling out extra spending cuts and tax increases to offset a potential shortfall in growth.

Speaking to BFM TV on Friday, Lombard said it was necessary to see in the coming weeks how negotiations over tariffs with the US would go, to then have a better idea of the impact on the French economy.

If tariffs on European Union imports — announced on Wednesday to be set at 20 per cent, with higher levels on certain French territories — were maintained, Lombard said: “Revenue would decrease, the GDP would decrease, which would — without getting too technical — degrade the level of the deficit, and I think in that case, to protect the French people, I think we must accept that.”

Sir Keir Starmer must harness Britain’s post-Brexit freedoms to transform the country into “Singapore-on-Thames” in the wake of a global trade war launched by President Trump, Jeremy Hunt has said.

SIMON JONES

In his first major intervention since stepping down as chancellor, Hunt warned that Britain risked tipping into recession and long-term economic stagnation if it erected more trade barriers.

Instead, he has called on the prime minister to turn Britain into a low-tax nation that welcomed free trade and could thrive at a time of global instability.

• Read in full: Former chancellor urges Starmer to embrace free trade

By Martin Strydon, Business News Editor

London’s leading share index opened lower this morning and is on track for its worst weekly fall since August 2023. The FTSE 100 fell 1.14 per cent, or 97 points, to 8376.56, with financial and mining stocks down sharply.

Banks fell in expectation that the Bank of England could cut interest rates faster than expected if tariffs push the economy close to recession. NatWest fell 5 per cent and Barclays and Lloyds Banking were also down.

Asia-focused banks Standard Chartered and HSBC dropped on concerns about the impacts of tariffs on income.

Miners were dragged lower on concerns about their reliance on China, the world’s biggest consumer of commodities, and a slowdown in the global economy. Fresnillo, Glecore, Anglo American, and Antofagasta were all in the red.

Investors moved into defensive stocks, boosting shares in utilities and tobacco companies.

The US giving the baseline level of tariffs to the UK is an “opportunity”, a former Tory international trade secretary has said.

Anne-Marie Trevelyan told LBC that the UK has “come off well” by being given a tariff level of 10 per cent. She added that it made the country “very competitive” when trading with the US, especially compared to the EU which is on a higher level of 20 per cent.

MARK THOMAS/ALAMY LIVE NEWS

“This is an opportunity for the UK, for the business and trade department to think about how we draw businesses to the UK rather than the EU,” she said.

Asian shares slid further Friday after President Trump’s tariffs, even as markets in Shanghai, Taiwan, Hong Kong and Indonesia were closed for holidays which limited the scope of Friday’s sell-off.

Tokyo’s Nikkei 225 lost 4.3 per cent to 33,263.58, while South Korea‘s Kospi sank 1.8 per cent to 2,441.86. The two US allies said they were focused on negotiating lower tariffs with Trump’s administration. Australia‘s S&P/ASX 200 dropped 2.2 per cent to 7,684.30.

In other trading early Friday, the US dollar fell to 145.39 Japanese yen from 146.06. The euro gained to $1.1095 from $1.1055.

James Murray, the exchequer secretary to the Treasury, told the Today programme that “everything is on the table” and “we reserve the right to retaliate”.

“We won’t hesitate to act in the national interest,” he said, but added that the government is “fully focused” on securing a deal with the US which would lift the tariffs.

TAYFUN SALCI/ZUMA

The US has slapped duties above its new 10 per cent baseline on Fiji, Vanuatu and Nauru, for running trade surpluses.

The 22 per cent tariffs on Vanuatu were expected to impact exports and hurt kava farmers, a spokesperson for the prime minister said.

Biman Prasad, the finance minister for Fiji, said that the country applied a 0 or 5 per cent duty on 96 per cent of US imports. President Trump‘s levy “is quite disproportionate and unfair”, he added.

Papua New Guinea, the most populous Pacific island country, said it had no plans to retaliate against the US decision to impose a 10 per cent tariff.

“If the US market becomes more difficult due to this tariff, we will simply redirect our goods to markets where there is mutual respect and no artificial barriers,” James Marape, the prime minister, said.

• Read in full: Nowhere is safe from Trump’s tariffs. Not even penguin islands

London’s FTSE 100 index of companies declined further after the City’s financial markets opened this morning.

The index slipped by 0.53 per cent, or about 45 points, to 8,429.98 points after the start of trading.

The fall, which followed further declines in the Asian markets amid continued concerns over Trump’s tariff plans, came after London’s top index slid by 1.55 per cent in Thursday’s session.

The foreign secretary said he regretted the “return to protectionism” in the US.

David Lammy, the foreign secretary, also acknowledged that British people would be “very concerned” about how they could be impacted.

GEERT VANDEN WIJNGAERT/AP

He told reporters: “We are a nation that believes in open trade, and I regret the return to protectionism in the United States, something that we’ve not seen for nearly a century.

“Of course, we have been absolutely clear that all options are on the table as we ensure the national interests of the British people, who will be very concerned at this time about how this affects the bottom line for them and their economic welfare.”

A Treasury minister said that the UK was “disappointed” with US tariffs when asked if President Trump was right to say Sir Keir Starmer was “very happy” about Britain’s treatment.

James Murray, the exchequer secretary to the Treasury, told Times Radio that the UK was in a “better position” than other countries because it is on the lowest band of tariffs. However, he added that all option would be kept on the table and said: “We’re disappointed at tariffs being imposed globally.”

“Do not retaliate, negotiate”, is the message to the government from the chief executive of one of Britain’s biggest private companies.

JCB confirmed plans to double the size of a new factory in Texas in the wake of Trump’s tariffs announcement.

Graham Macdonald, the chief executive of the company which has been making diggers and other machinery in America for more than 50 years, told the Today programme that making in the US is “the way to really mitigate” tariffs.

Macdonald also said he would be looking at “trying to push pricing as much as we can to recover”, as he expected every industry to do.

Asked whether the UK should retaliate, he said: “No. Entering into a trade war with an economy the size of the US, we are not in a position (to do so). It’s a trade war we can only lose.”

The European Union should not retaliate with exactly the same tools used by the US in response to the tariffs as it would impact EU consumers, a French minister said on Friday.

Eric Lombard, the finance minister, said: “We are working on a package of responses that can go well beyond tariffs, in order, once again, to bring the US to the negotiating table and reach a fair agreement.”

President Trump boarding Air Force One to travel to his Mar-a-Lago Resort on Thursday

MANDEL NGAN/AFP/GETTY IMAGES

Melanie Joly, Canada’s foreign minister, said on Friday that the relationship between the US and her country would never be the same after President Trump’s new tariffs regime was announced on Wednesday.

At her arrival for a Nato meeting of foreign affairs ministers in Brussels, Joly added that Canada was putting maximum pressure on the Trump administration.

Shares of Japanese banks fell sharply on Friday as President Trump’s tariffs sparked fears of a downturn in global growth that could delay rate increases in the world’s fourth-largest economy.

The Tokyo index of banking stocks was down 10 per cent at 5.37am GMT. Shares of Mitsubishi UFJ Financial Group, Japan’s biggest bank by assets, had also fallen 10 per cent.

A stock quotation board showing Nikkei share average in Tokyo

KIM KYUNG-HOON TPX /REUTERS

Ling Ji, China’s vice-minister of commerce, said that China was willing to work with the EU to maintain a rules-based multilateral trading system and bring certainty to global trade, state media reported on Friday.

China was willing to work with the bloc to resolutely oppose protectionism, unilateralism and bullying, said Ling, at a meeting of the China-Hungary Economic Joint Committee in Budapest.

Washington’s allies and rivals alike warned of a blow to global trade. Japan, one of the biggest trading partners with the US and its largest foreign investor, was now facing a “national crisis”, Shigeru Ishiba, the prime minister, told parliament.

Nissan Motor said on Thursday it would not take new orders from the US for two Infiniti SUVs, in a scaleback of its operations at the Compas plant it has run together with Mercedes-Benz in Mexico.

Nissan also said it would now maintain two shifts of production of the Rogue SUV at its Smyrna plant in Tennessee after announcing in January that it would end one of the two shifts this month.

Imported cars parked at a processing terminal at the Port of Los Angeles

MARIO TAMA/GETTY IMAGES

Nissan said production was expected to continue for those models sold in other markets.

The US dollar fell on Friday and the safe-haven yen strengthened towards a six-month peak, as traders weighed the fallout from President Trump’s new tariff measures.

The US dollar slipped toward a six-month trough against the euro before the release of payrolls report later in the day, which will offer clues to the health of the economy and the outlook for monetary easing.

Traders predicted four quarter-point interest rate cuts from the Federal Reserve for the remainder of this year, and reduced the odds of further Bank of Japan tightening to almost nil.

The Australian and New Zealand dollars also fell as shockwaves from Trump’s harsher-than-expected tariffs were rippled through markets more than 24 hours after they were unveiled.