Tariffs reside: FTSE reacts after Trump’s 90-day climbdown however China hits out at US ‘blackmail and bullying’
China has hit back at the US as its stand off against Donald Trump shows now sign of ending – but, despite the chaos, global markets have rebounded amid days of volatility.
In a humiliating climbdown, the US president made the shocking decision to implement a 90-day freeze on the hefty duties he had just imposed on dozens of countries, bringing relief for battered global stock markets on Thursday.
However, he ratcheted up the pressure on China, immediately hiking the tariff on Chinese imports to 125 per cent from the 104 per cent level that kicked in on Wednesday, as the trade war between the world’s top two economies continues to escalate.
Beijing slapped 84 per cent tariffs on US imports on Wednesday in return, and hinted at further counter-measures in response to the US’s “blackmail” and “bullying” on Thursday.
Despite neither side appearing to back down in the US-China stand off, global markets have rallied in relief at the pause on tariffs imposed on other countries.
The UK’s FTSE 100 soared by more than 6 per cent after stock markets opened in London.
The US benchmark S&P 500 index closed 9.5 per cent higher on Wednesday, and the relief continued into Asian trading on Thursday with Japan’s Nikkei index surging more than 8 per cent, while even Chinese markets like the CSI 300 and Hong Kong’s Hang Seng Index showed gains.
However, all countries other than China will still face what Mr Trump calls his “baseline” 10 per cent tariff, and the UK government says it does not expect those to be paused.
UK ministers still hopeful for economic deal with US to soften blow of Trump’s tariffs
UK ministers still hope an economic agreement with Washington can be reached to soften the blow of some of Donald Trump’s tariffs.
Chancellor Rachel Reeves will seek to negotiate with the US when she visits Washington at the end of April for the International Monetary Fund’s spring meeting of global finance ministers, she told the Financial Times.
She also said a UK-EU summit on May 19 would be a chance “to refresh our relationship and make it easier for businesses to trade”.
Economists remain concerned uncertainty over Trump’s policy will hold back global growth
Despite the changes to Mr Trump’s tariff regime, economists remain concerned that the prolonged uncertainty over his policy will hold back growth around the world.
Global markets have seen days of volatility amid the US president’s announcements of tariffs and humiliating climbdowns.
Index of UK’s top stocks still low as US’s 10% levy still in force
While the FTSE has rebounded following its downturn in earlier days, the index of the UK’s top stocks is still far below where it was in the days before Donald Trump’s tariffs came into force.
The US pause has not completely eliminated taxes on goods into America, with all countries now expected to pay a 10 per cent levy, instead of the “reciprocal” rates Mr Trump’s administration had originally set out.
Some of America’s trading partners had threatened retaliatory action before the pause, like the EU, which had voted to impose countermeasures on some US goods.
The UK had been spared higher tariffs rates hitting others and had resisted retaliatory action.
Other countries now find themselves in the same situation as the UK, which was already required to pay the 10 per cent tariff rate.
Imports of cars, steel and aluminium to the US are all still subject to a 25 per cent tariff.
A Downing Street source said the development shows that “cool and calm can pay off” and that the way Sir Keir Starmer “does business” is the “right approach”.
UK ministers urge caution in face of instability
UK ministers have urged caution in the face of instability, despite rising market confidence.
Hom secretary Yvette Cooper 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 the prime minister’s set out, maintaining that stability in the face of the different turbulences.
“We are not keeping a running commentary on different trade negotiations, on the different approaches that other governments are taking.”
She added: “What we are doing is just being really steady about this. We have made clear our principles and our approach. We want to see a reduction of trade barriers and we want to negotiate good arrangements that are in the UK’s interests.”
China vows to continue to take countermeasures against US if necessary
China has vowed to continue to take countermeasures against the US if necessary.
The Chinese commerce ministry said today: “China has taken, and will continue to take, resolute countermeasures to safeguard sovereignty, security and development interests.”
China says it does not fear more US tariff threats
China is not interested in a fight but will not fear if the US continues its tariff threats, the Chinese foreign ministry said in reply to questions about the US tariffs on Thursday.
“The US cause doesn’t win the support of the people and will end in failure,” ministry spokesperson Lin Jian said at a regular press conference.
China will not sit back and let the legitimate rights and interests of the Chinese people be deprived, Lin added.
China ‘open’ to dialogue with US but calls for talks based on ‘mutual respect’
China has said it is open to dialogue with the US but this must be on the basis of mutual respect and equality.
Chinese commerce ministry spokesperson He Yongqian also told a regular press briefing on Thursday that “there is no winner in a trade war”, calling protectionism a “one-way road”.
ANALYSIS: The FTSE 100 resurgence is on
The Independent’s Business and money editor Karl Matchett writes:
Ping! Like that, the FTSE 100 resurgence is on. In (very) early trading, London’s main index is showing a 6.2pc rise as retail investors no doubt join in the buying frenzy, if they have any deployable cash left after contributing to yesterday’s evening’s S&P 500 rocket anyway.
A whopping 97 companies are in the green right now, with only supermarkets left behind after Tesco issued a lowered profit warning this morning. They (-3.76pc), Sainsburys (-4pc) and Marks and Spencer (-0.2pc) are the only FTSE 100 firms in the red. At the other end of the scale, Barclays is 17.7pc up.
China warns it ‘will follow US to the end’ as it hints at further measures in escalating trade war
China has warned Donald Trump that “if the US insists on its own way, China will follow it to the end” as the country hinted at imposing yet more measures in the escalating trade war between the world’s top economies.
The Chinese commerce ministry said that “pressure, threats and blackmail are not the right way to deal” with China as it vowed to follow the US “to the end”.
The Chinese foreign ministry today again accused the US of “bullying” and said that taking further measures is “aimed at protecting our own sovereignty, security and development interests”.
UK’s FTSE 100 soars by 6% after stock markets open in London
The UK’s FTSE 100 has soared by more than 6 per cent after stock markets opened in London.
The index was gaining about 475 points in early trading on Thursday, following a significant rally for markets in the US and Asia.
The sharp gains come after US President Donald Trump announced he would be pausing tariffs on most countries, excluding China, for 90 days.
