Trump tariffs dwell: FTSE 100 plummets after UK companies warn commerce conflict will ‘wreak havoc’
Global markets tumbled in the wake of Donald Trump’s tariffs, as UK business chiefs warn the fallout of the measures will “wreak havoc”.
Donald Trump has slapped a 10 per cent tariff on US imports of UK goods, as he set out sweeping trade levies hitting countries across the world.
In response, London’s FTSE 100 dropped sharply on opening, falling 122.4 points or 1.4 per cent in the first few minutes of trading. Japan – which was hit with a 24 per cent tariff – saw its Nikkei 225 index slump to an 8-month low.
Shevaun Haviland, director general of the British Chambers of Commerce, has said Trump’s imposition of tariffs is a “lose-lose situation for everyone”.
“No-one will escape the fallout from these decisions, there will be an increased risk of trade diversion, and it will wreak havoc on business communities across the world,” she said. “Orders will drop, prices will rise, and global economic demand will be weaker as a result.”
Recap: Trump’s tariffs spark global fears of economic downturn
If you’re just joining us now, here is a summary of what has happened overnight and this morning:
• Donald Trump announced his “Liberation Day” plans which included sweeping tariffs for countries around the world.
• The UK did not escape the measures, and British firms have been hit by a 10 per cent tariff on all exports to the US.
• European Union nations face 20 per cent penalties while China will pay 34 per cent and Cambodia an eye-watering 49 per cent.
• Global markets tumbled in response, with heavy falls in Asia seeing Japan’s Nikkei index slump to an 8 month low.
• London’s FTSE 100 dropped sharply on opening, falling 122.4 points or 1.4 per cent in the first few minutes of trading.
• World leaders responded differently to the measures. China has urged the US to reverse its “wrongdoing” whilst the UK appears to still be working on a deal to secure a better economic deal with Trump.
China urges US to correct ‘wrongdoing’ over reciprocal tariffs
China has called for Donald Trump to reverse its new tariff measures, after it was hit with a 34 per cent levy on imports to the US.
China’s foreign ministry urged the US to correct its “wrongdoing”, claiming that the imposition of additional tariffs on China and other countries “severely violated” World Trade Organisation rules, and “harmed” rule-based international trading regime,
The ministry spokesperson Guo Jiakun urged the US to resolve trade and economic disputes with it and other countries through consultation.
Business secretary working to reverse tariffs
Jonathan Reynolds has said he is working to reverse Donald Trump’s tariff measures altogether rather than securing a deal to compensate for them
When asked if he was hoping to do a deal to ofsett the tariffs, the business secretary said: “No, I want those tariffs removed. I want them removed in terms of the 10 per cent that’s been announced. I want them removed on steel and aluminium.”
He added: “I want not only to remove what has been announced so far, but to strengthen that relationship.”
PM chairs roundtable with UK business leaders after tariff announcement
London Stock Exchange opens in the red
As expected, the London Stock Exchange opens with many companies in the red and the index as a whole down by 1.4 per cent – though not every single constituent is down, with 15 in the green and a further three companies flat.
For the other 82 though it’s red all the way, with Barclays down 4.5 per cent, Anglo American (4.49 per cent) and Polar Capital Tech Trust (4.78 per cent) likewise strongly impacted and JD Sports (6.23 per cent) as the hardest hit in early trading.
Doubtless there will be a big initial reaction as retail traders and other investors are now added to the mix, though often we do see an initial plummet and then a slight recovery later in the day.
Then again, we don’t exactly have worldwide tariffs imposed by the richest economy on the planet every day, so who knows what the template is for the upcoming eight hours or so.
UK business secretary reacts to sweeping tariffs
The UK’s business secretary has been speaking about the potential impact of Donald Trump’s new tariff measures.
Jonathan Reynolds told various news outlets that the announcement marked a “very big moment” and that he was “disappointed” the UK wasn’t exempt.
He said he understood the 10 per cent tariff on US imports of UK goods will not come on top of the 25 per cent imposed on all foreign cars imported to the US.
Tariffs on cars are a “real issue” and there is “no need” for them, he said.
Asked by Nick Ferrari on LBC if up to 25,000 jobs in the motor industry could go following the tariffs, he said: “I know everyone in the automotive sector in particular will have those concerns.
“The products that we have, in the main, are very successful at exporting to the US, from Jaguar Land Rover, BMW, Aston Martin, these are often the higher value parts of the market, so the impact of tariffs will be slightly different to those.”
FTSE 100 plummets at opening
London’s FTSE 100 Index dropped sharply on opening, falling 122.4 points or 1.4 per cent to 8486.09 in the first few minutes of trading.
It comes after US President Donald Trump unveiled sweeping new tariffs on US imports.
‘Nothing off the table’ as UK considers how to respond to tariffs
Sir Keir Starmer has restated his position that “nothing is off the table” in considering how to respond to Donald Trump’s tariffs.
But pursuing a deal, rather than hitting back with retaliatory taxes on US imports, appears to be the Government’s priority.
The Prime Minister said: “Today marks a new stage in our preparation. We have a range of levers at our disposal and we will continue our work with businesses across the country to discuss their assessment of the options.
“Our intention remains to secure a deal, but nothing is off the table.”
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