Tariffs reside: Trump admits ‘costs’ however warns increased levies will return if nations can’t strike offers with US
Donald Trump has admitted the United States will face “transition costs” as a result of his global tariffs, while threatening to reimpose the full rate of his “reciprocal” levies if countries fail to strike a deal with him within 90 days.
London’s FTSE 100 closed 3 per cent higher as it rebounded somewhat alongside other European markets in Thursday’s trading, but Wall Street’s pain continued despite Mr Trump announcing the three-month pause in which most of his so-called “reciprocal” tariffs will remain at a blanket 10 per cent.
Although his threats continued on Thursday, the US president also signalled that he could be open to extending the pause, telling reporters: “We’ll have to see what happens at that time.”
But in what may be a blow to Sir Keir Starmer, Mr Trump’s trade adviser Kevin Hassett warned that the lower rate was likely to remain for most of Washington’s trading partners, telling CNBC: “It is going to take some kind of extraordinary deal for the president to go below [that].”
Mr Trump escalated his trade war with China further on Thursday, imposing tariffs of 145 per cent, while the European Union put its retaliatory measures on hold for 90 days to “give negotiations a chance”.
Watch: Trump insists ‘all going to work out really well’ amid tariff stock market turmoil
Trump claims TikTok deal still on the table as China tariffs threaten to derail agreement
Donald Trump says his TikTok deal is still on the table, even after Chinese officials backed out on account of his tariffs.
Trump said on Wednesday that a potential deal for ByteDance — TikTok’s Chinese parent company — to divest and keep the app available in the US is “still on the table.” However, several reports earlier this week claimed the deal was derailed by the president’s slew of new tariffs on China.
“We have a deal with some very good people, some very rich companies that would do a great job with it, but we’re going to have to wait and see what’s going to happen with China,” Trump said from the Oval Office. “It’s on the table, very much.”
Katie Hawkinson reports from Washington DC:
Opinion | Big Tech’s bet on Donald Trump has blown up in their face. No one is surprised but them
In a piece for Independent Voices, our senior US news reporter Io Dodds writes:
On January 20, we watched Silicon Valley leaders including Mark Zuckerberg, Tim Cook and Jeff Bezos line up together at Donald Trump’s inauguration. It was part of an unprecedented display of truckling and toadying apparently calculated to ensure that, no matter how many people the big man fired or locked up, he’d at least protect Big Tech’s bottom line.
So how’s that going? In the space of a week, roughly $80 billion was wiped off the combined net worth of Bezos, Zuckerberg, and Elon Musk due to Trump’s blitz of tariffs (or, in plainer language, import taxes). Meanwhile, the administration has not stopped its antitrust lawsuits against Meta, Google, Amazon, and Apple, and is still protecting TikTok (a huge rival to Meta) in apparent defiance of U.S. law.
To be clear, few of these moguls are likely to be very bothered by the hit to their net worth. Most see mere paper wealth — which fluctuates often and is sometimes kind of fictional anyway — as less important than building durable companies that shape the world.
Yet if Trump plans to help them do that, he’s got a funny way of showing it. Even after the White House’s partial retreat on Wednesday, tariffs remain much higher than before, and astronomical with China. That’s bad for Big Tech because almost every aspect of microchip and computer hardware manufacturing crosses international borders, and is especially concentrated in the People’s Republic.
Read the full article here with Independent Premium:
Starmer insists no two countries aligned as closely as UK and US
Sir Keir Starmer denied today that the UK’s decision not to respond harshly to Donald Trump’s tariffs has been wasted, with Mr Trump’s climbdown yesterday leaving most nations now facing a 10 per cent levy – the same as originally imposed on the UK.
Asked whether he thought not retaliating to US tariffs had resulted in no 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.”
Pressed that most nations now face the same tariff rate as the UK, Sir Keir said: “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.”
Asked if he was comfortable with the US president’s suggestions countries were “kissing my ass” to hold trade deal talks, Sir Keir insisted America was Britain’s “closest ally” and it was important to maintain a “calm and pragmatic approach” to negotiations.
Trump’s tariff pause does little to lower overall tariff rates, Yale researchers say
Donald Trump’s climbdown yesterday has done little to lower the average import duty rate from the elevated levels to which his wave of tariffs had driven them, according to researchers from Yale University.
“Consumers face an overall average effective tariff rate of 25.3 per cent, the highest since 1909,” the Yale Budget Lab wrote.
“This is only slightly different from where the effective rate was before the late-April 9 announcement. Even after consumption shifts, the average tariff rate will be 18.1 per cent, the highest since 1934.”
Watch: Trump brags to racing drivers that his friend made $2bn from stock market chaos
Markets ‘don’t know what the end game is’ with Trump tariffs, says analyst
The stock markets “don’t know what the end game is” with Donald Trump’s tariffs, an analyst has warned, as Wall Street closed with all three major indexes down in today’s trading despite the US president’s climbdown on Wednesday.
“Investors are still uncomfortable with it, because they don’t know what the end game is,” Paul Nolte, a senior wealth advisor at Illinois-based firm Murphy & Sylvest, told Reuters. “”I think what we’re seeing, still, is investor concern about tariffs and that is pretty much front and center for everything.”
“It’s hard for investors to feel comfortable about buying stocks with volatility so high,” Mr Nolte added.
Wall Street closes sharply lower as tariff risks send investors fleeing
All three major US stock indexes once again suffered steep losses today, forfeiting much of the previous session’s gains as growing concerns over the escalating Washington-Beijing trade face-off dampened optimism over upbeat economic data and US-Europe trade negotiations.
According to preliminary data, the S&P 500 closed 3.45 per cent lower, while the Nasdaq Composite was down 4.31 per cent, and the Dow Jones Industrial Average was 2.54 per cent lower at the close of trading today.
Big Tech came under pressure once again, with each of the so-called Magnificent Seven group of artificial intelligence-related momentum ending with steep losses.
Analysis | Trump’s first cabinet meeting after tariffs climbdown might as well have been held in Moscow
The Independent’s senior US correspondent Richard Hall writes:
Donald Trump has made no secret of his affinity for Russian president Vladimir Putin’s leadership style, and he got to experience it first-hand Thursday in a cabinet meeting that has been described as “Kremlin-esque.”
Just a day after President Trump backtracked on a disastrous tariff policy that sent global markets into turmoil, cabinet members lined up to massage the president’s ego with sycophantic language that would make North Korean newsreaders blush. Trump sat stony-faced through each tribute, occasionally offering commentary when they were done.
After Trump’s cabinet had finished giving their updates, Trump spoke at length in response to questions from a White House pool that had been carefully selected and bolstered by friendly outlets, as it is in Moscow.
He described the rebound from his self-induced downturn as “the biggest day in history” and warned there would be “transition difficulty.”
The president appeared eager to move on from his attempt to impose tighter government control over the economy, and with it isolation from the global market, perhaps looking forward to a giant military parade that is rumoured to be in the works for this summer – all to celebrate his birthday. Sound familiar?
Dollar hits 10-year low against Swiss franc as markets digest trade war drama
The US dollar has hit a 10-year low against the safe-haven Swiss franc, as markets digested Donald Trump’s dramatic reversal on tariffs.
The greenback rebounded against the Swiss franc and Japanese yen on Wednesday, while Wall Street’s main stock indexes leaped as Mr Trump’s tariff climbdown brought some relief to investors.
But traders were readjusting their positions today, with the dollar dropping 2 per cent to 144.795 yen and 3.6 per cent versus the Swiss franc to 0.82635.
The dollar has fallen 3.46 per cent against the yen and nearly 6.5 per cent against the Swiss franc so far this month. It is on track for the biggest one-day loss against the franc since January 2015.
