The UK’s key FTSE-100 stock market has suffered its worst one-day drop since the start of the pandemic, ending a week of havoc on global markets prompted by Donald Trump’s new tariffs war.
The index closed down 419.75 points, or 4.95 per cent, at 8,054.98, marking the biggest single-day decline since March 2020, when the index lost more than 600 points in one day.
All but one FTSE stock fell on Friday, with Rolls-Royce, banks and miners among those suffering the sharpest losses.
China announced earlier it would impose a 34 per cent tariff on imports of all US products, matching the “Liberation Day” levy imposed by President Trump, ushering in a trade war between the world’s two largest economies.
Virgin founder Richard Branson called for Mr Trump to “realise his mistake” and reverse his policy of introducing hefty tariffs on nearly every country.
The billionaire businessman warned they would make people everywhere poorer, saying: “Countries that trade fairly and healthily prosper and flourish. They reduce poverty, improve health and education, and decrease the likelihood of war.”
Sir Keir Starmer will be holding talks with global leaders this weekend.
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ICYMI: Trump tells UK to buy chlorinated chicken from US if it wants tariff relief
Britain must allow US chlorine-washed chicken into UK markets if it wants relief from sweeping tariffs, Donald Trump has indicated.
In a statement published alongside the tariff announcement, the White House said: “The UK maintains non-science-based standards that severely restrict US exports of safe, high-quality beef and poultry products.”
It suggested that Britain’s ban on chlorinated chicken was among a range of “non-tariff barriers” that limit the US’s ability to trade.
The UK has long ruled out allowing imports of chlorine-washed chicken from the US due to health concerns, with Rachel Reeves in November reiterating her opposition to any concessions on the issue.
Read more details in this report:
John Rentoul answers your Trump tariffs questions
In a live Q&A for The Independent, chief political commentator John Rentoul answered your questions on Trump’s trade war, the UK’s response and whether Keir Starmer can steer a better course with the EU.
They discussed soft power, chlorinated chicken, the single market, and whether China really stands to gain.
We’ve rounded up the biggest questions from readers – and Rentoul’s answers here.
Will cheese prices soar?
A collection of feta producers in Greece have already noted they’ll be severely impacted, with half their sales to America likely to disappear. “We have to divert these quantities to other markets,” said the head of Greece’s association of dairy industries.
That could mean lower prices elsewhere to stoke demand, or trying to find new territories to sell into. But even the latter could see price rises as the wider economic impacts of recession risk and supply chain disruptions are felt.
The European Dairy Association has similarly criticised the move as “unjustified”.
Will there be a stock market crash?
“If anything, it could be argued there is now an opportunity to buy shares in companies or funds at much lower prices,” says one expert:
Full trade war would be damaging, leaders say
Sir Keir Starmer, Australia’s Anthony Albanese and Italy’s Giorgia Meloni agreed an “all-out trade war would be extremely damaging” during phone calls, Downing Street said.
The prime minister 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 spokesperson from his office said.