Trump tariffs reside: Global shares sink and FTSE sees greatest drop since Covid pandemic on second day of market turmoil
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.
Trump’s tariffs squeeze Republicans as they struggle to pass his agenda
If president Donald Trump hoped to get a better day on Wall Street two days after his massive tariff announcement, he was sorely mistaken.
“While uncertainty remains elevated, it is now becoming clear that tariff increases will be significantly larger than expected, and the same is likely to be true of the economic effects, which will include higher inflation and slower growth,” Mr Powell said.
US senate votes till late on Republican budget plans including Trump’s tariff
The discussions and voting from the US senators continued all night over a Republican budget plan that’s central to president Donald Trump’s agenda for trillions of dollars in tax breaks and boosts to border security and defence spending.
The US economy is churning over Mr Trump’s vast tariff scheme sent stocks plummeting, and experts are warning of soaring costs for consumers at home and threats of a potential recession. Even some Republicans have expressed concerns.
In what is being called “vote-a-rama”, Democrats are intent on making the effort as politically painful as possible, with votes on dozens of amendments to the package that GOP senators will have to defend before next year’s midterm elections.
One Republican senator Bill Cassidy of Louisiana, expressed his own misgivings about tax breaks adding to the federal deficits and said he has assurances that Mr Trump officials would seek the cuts elsewhere.
“This vote isn’t taking place in a vacuum,” he said, a nod to the turmoil over Mr Trump’s tariffs.
Trump tariffs to force quicker US and EU interest rate cuts, says investment bank
Donald Trump’s global tariffs will stymie economic growth and cause rising inflation, forcing the US Federal Reserve to start lowering interest rates from the end of this year – while the European Central Bank could cut rates as soon as this month, analysts have forecast.
The tariffs are “worse than feared”, said Japanese investment bank Nomura, lowering its US growth estimate to 0.6 per cent from 1.5 per cent, on a quarterly basis, and hiking its core year-end inflation forecast to 4.7 per cent – up from 3.5.
As a result, the brokerage expects the Fed to lower rates in December, taking the policy rate to 4.125 per cent, followed by two more 25 bps cuts in the first quarter of 2026. It had previously expected the central bank to hold at 4.25-4.5 per cent until the second quarter of 2026.
“Increased downside risks to growth and a more front-loaded inflation shock should allow cuts to resume sooner than we had expected”, Nomura economists said in a note on Thursday.
And the ECB will be forced to act even quicker than the Fed, said Nomura, which now expects the central bank to cut rates in April as well as June, resulting in a terminal rate of 2 per cent, from 2.25 per cent predicted previously.
Rubio discusses tariffs with Netanyahu, says State Department
US secretary of state Marco Rubio has discussed tariffs with Israel’s prime minister Benjamin Netanyahu, the State Department said in a readout of their conversation last night in the aftermath of a sweeping new tariff policy announced by the United States.
Unspecified Israeli goods exports to the United States, Israel’s largest single trading partner, face a 17 per cent tariff.
The two discussed the situation in Gaza and the Trump administration’s resolve to free the hostages in Gaza, the readout said.
France open to letting deficit reduction target slip amid tariff uncertainty, minister says
France’s finance minister Eric Lombard has opened the door to letting the French government’s deficit reduction target slip this year – ruling out extra spending cuts and tax increases to offset a potential shortfall in growth.
Speaking to BFM TV, Mr Lombard said things were uncertain and it was necessary to wait to see in the coming weeks how negotiations with the United States would go over recently announced tariffs to have a better idea of their impact on the French economy.
If tariffs on the European Union – amounting to 20 per cent on EU imports, with higher levels on certain French territories – were maintained, Mr Lombard said, “revenue would decrease, the GDP would decrease, which would – without getting too technical – degrade the level of the deficit, and I think in that case, to protect the French people, I think we must accept that.”
France has been aiming to trim its deficit to 5.4 per cent of economic output this year from 5.8 per cent last year as a step toward bringing its shortfall in line with a European Union ceiling of 3 per cent by 2029.
But Paris still has one of the biggest fiscal gaps in the EU and, unlike other big European countries, it will not be able to bring its debt burden to pre-pandemic levels by the end of the decade.
Exclusive: Tony Blair urges Starmer not to retaliate against Trump tariffs
Sir Tony Blair has urged Sir Keir Starmer not to retaliate against Donald Trump’s tariffs, saying such a move wouldn’t be in the UK’s “best interests”.
It comes as officials scramble to respond to the news that British exports to the US would face a blanket 10 per cent levy, sending global markets tumbling and sparking fears the chancellor’s fiscal headroom could be wiped out.
In a rare intervention, the former prime minister told students at King’s College London that he supported Sir Keir’s “cool heads” approach to Trump’s “Liberation Day”, and he didn’t really understand the intellectual argument behind the tariff policy.
“I don’t think it is in the UK’s best interest to retaliate,” he said, but admitted he did not know where developments over the tariffs would end.
Jane Dalton and Millie Cooke have more details in this exclusive report:
Markets will bounce back, Rubio insists
US Secretary of State Marco Rubio has defended Mr Trump’s tariffs, saying he was confident the markets would bounce back.
“Businesses around the world, including in trade and global trade, they just need to know what the rules are,” he said from a Nato meeting in Brussels. “Once they know what the rules are, they will adjust to those rules.”
“I don’t think it’s fair to say economies are crashing. Markets are crashing because markets are based on the stock value of companies who today are embedded in modes of production that are bad for the United States.”
Trump closes China tariff loophole used by fast fashion retailers
Donald Trump has signed an executive order to shut down a trade loophole known as “de minimis” that has allowed low-value packages from China and Hong Kong to enter the US free of duties.
The move appears to be a massive blow to fast-fashion companies such as China-based Shein and Temu, which managed to rapidly expand in the US through the almost century-old de minimis rule. This tariff exemption will end on 2 May, the White House said on Wednesday.
More here:
Bull market is dead, say analysts
Analysts say the bull market — which occurs when prices are rising and investor optimism is high — is now “dead.”
“The bull market is dead, and it was destroyed by ideologues and self-inflicted wounds,” Emily Bowersock Hill, CEO of Bowersock Capital Partners, told CNBC.
“While the market may be close to the bottom in the short-term, we are concerned about the impact of a global trade war on long-term economic growth.”
