Tariffs reside: Global markets brace as US confirms China to be hit with 104% levies in a single day
The EU has pleaded with China not to escalate the bitter trade war with the US.
In a call with Chinese Premier Li Qiang, European commission president Ursula von der Leyen called for a “negotiated resolution”, urging both sides to “avoid further escalation”, according to a statement released today.
It comes after the Chinese foreign ministry vowed its country would “fight till the end”, as it accused the US of “typical unilateralism and protectionist economic bullying”.
This is despite Donald Trump saying that Washington will impose an extra 50 per cent levy on top of the existing 54 per cent tariff on Chinese imports if Beijing does not withdraw the 34 per cent tariffs it had imposed on US products last week.
If neither side blinks and Mr Trump sticks to his plans, the total new levies could climb to 104 per cent on Chinese goods imported into the US this year.
Meanwhile, London’s FTSE 100 finally rebounded this morning after several days of heavy losses. The index was up more than 1 per cent within the first few hours of trading.
It follows a more positive session for Asian markets, with some indexes making gains after suffering from steep falls in previous days, despite Mr Trump’s threats to China.
‘We have your back,’ Reeves tells families
Rachel Reeves has appealed directly to families facing a financial squeeze from Donald Trump’s tariffs, with millions of savers’ pensions and other savings pots being blown apart by the trade war.
“I know that this is an anxious time for families who are worried about the cost of living, we have your backs,” she told MPs.
“And British businesses who are worried about what a changing world will mean for them… we have your backs too,” she added.
UK government working to agree trade deal with India, Reeves says
The UK government is working to agree a trade deal with India and talks will take place on Wednesday, Rachel Reeves told MPs.
The Chancellor said she had spoken to ministers in Canada, Australia, Ireland, France, Spain and the European Commission since the imposition of tariffs by Donald Trump, and would have separate discussions with India on Wednesday.
Ms Reeves said: “We will pursue these talks in earnest. Tomorrow I will hold talks with the Indian government as part of our two nations’ economic and financial dialogue, as we seek to secure a new trade deal with India.”
Trump’s tariffs having ‘huge implications for world economy’, says UK chancellor
UK Chancellor Rachel Reeves has told MPs the Donald Trump’s tariffs have had and will continue to have “huge implications for the world economy”.
She continued: “These implications have been reflected in the reaction that we’ve seen in global markets in recent days, which the financial authorities have of course been monitoring closely.
“This morning I spoke to the governor of the Bank of England, who has confirmed that markets are functioning effectively and that our banking system is resilient.”
Comment: How Trump’s ‘Panican’ jibe at his tariff critics could backfire
Faced with mounting alarm in the US over his trade war, Donald Trump has resorted to his stock-in-trade of name calling. He has invented a new word to describe his critics: “Panican”.
He took to his Truth Social platform to defend himself against those opposed to his tariffs, who include some who have strongly supported him in the past.
He told them: “Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!).”
Simon Walters argues:
‘We don’t want tariffs,’ EU reiterates
The EU has reiterated that “we don’t want tariffs”.
The EU spokesperson added that the bloc is waiting for the US “to engage in a meaningful way”.
Europe and US should have zero tariffs between them, Finnish foreign minister says
Europe and the United States should have zero tariffs between them and Europe should aim for that in ongoing negotiations with the US, Finnish Foreign Minister Elina Valtonen said on Tuesday.
“Engaging in a global trade war is the surest way to achieve a global recession,” Valtonen told a joint press conference with her Swedish counterpart in Stockholm.
“But of course the European Union now has to react to what the US has put forward,” she added.
UK chancellor confirms markets are functioning effectively
UK chancellor Rachel Reeves has said that the governor of the Bank of England had confirmed that markets were functioning effectively, as the huge implications from US tariffs sent shockwaves through global markets.
ANALYSIS: Where exactly the FTSE 100’s push into the green is stemming from
Business and money editor Karl Matchett writes:
While we’ve seen the FTSE 100 is rising today for the first time in a while, it’s worth considering exactly where that push into the green is stemming from.
In fact, it’s a fairly widespread recovery this morning, with just nine companies showing a loss – still mostly in the financials sectors.
But British Airways owner IAG is up more than five per cent, Rolls Royce is just shy of that marker and indeed the owner of the London Stock Exchange, the London Stock Exchange Group, is up 3.2 per cent.
Reeves tells Commons ‘discussions are ongoing’ with US over tariffs
Rachel Reeves has told the Commons “discussions are ongoing” with the US over tariffs.
The chancellor is set to meet with the US treasury secretary Scott Bessent shortly.
