Tariffs cause day of market chaos — as it happened

Global markets fell and US stocks plunged along with the value of the dollar the day after President Trump announced his new regime, prompting fears of a possible recession after a return to tariff levels not seen since the 1930s. There were smaller falls in UK and European stock markets.

Trump said that the US would ultimately be stronger after a global trade war. “The operation is over,” he said. “The patient lived, and is healing. The prognosis is that the patient will be far stronger, bigger, better and more resilient than ever before.”

President Macron of France called Trump’s actions “brutal and unfounded” and suggested European companies should rethink investments in the US. The EU said it was “preparing for further countermeasures”, while Mark Carney, the Canadian prime minister, said he would respond with a tax on US vehicles.

British business leaders warned Sir Keir Starmer not to retaliate. The prime minister admitted that the tariffs would undoubtedly be damaging, but said the country faced a “new era” for trade that would require the government to go “further and faster” in building resilience and reforming the economy.

Read in full here.

President Trump used medical metaphors and caps lock when he talked up his tariff operation, but left his vice-president to go on the airwaves to warn Americans that the recovery process will take some time.

“THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING,” Trump wrote on his Truth Social site. “THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!”

Read in full — but mainly lower case — here.

Brendan Steinhauser, Republican strategist in Austin, Texas, said that GOP leaders were nervous that even a temporary spike in prices could trigger blowback from voters in next year’s midterm elections.

“It’s still very early … but if it goes in the wrong direction and it hurts American companies and workers it could have a huge impact, because the economy is always going to be the number one issue in our elections,” he said.

“It’s still too soon to tell. Right now, Republicans are giving the president the benefit of the doubt,” Steinhauser added.

“Privately, most members of Congress, their donors and many party leaders are nervous … but some of them are choosing not to say a whole lot.”

One sector which could be hit hard is champagne. The US is the largest export market for France’s leading sparkling wine.

“We’re all worried about the decisions made by the American president,” said David Chatillon, co-president of the Comité Champagne, the trade association for the industry.

Maxime Toubart, his co-president, said that the tax “puts in danger our presence on the American market” as well the economic viability of the whole sector and the Champagne region.

The trade group said champagne was “a key element of the French economy”, with nearly €6 billion ($6.7 billion) in annual sales.

Giorgia Meloni, the Italian prime minister, said that trade tariffs announced by the United States were a mistake but their impact should not be overestimated and the reaction needed to be carefully considered.

“We must not fuel alarmism, it’s not a catastrophe,” Meloni said in an interview on RAI, the Italian state broadcaster.

“I’m not convinced that the best way to respond to tariffs is with other tariffs,” she added.

Switzerland’s government described Trump’s tariffs as incomprehensible. President Keller-Sutter, who his also the finance minister, said she regretted that the US was “turning further away from free trade and a rules-based trade order” but that her government was not planning retaliatory measures for now.

Keller-Sutter said she had spoken to Ursula von der Leyen, the president of the European Commission, about the tariffs, noting that there was no indication that Switzerland could be affected by possible EU countermeasures.

Switzerland has abolished industrial tariffs and officials were stunned when Trump imposed a 31 per cent duty on imports from Switzerland, compared with 20 per cent from the EU. The US is Switzerland’s top export market, and Switzerland is the sixth-biggest foreign investor in the United States.

Mark Carney said it was time to “reset” relationships with the United States after President Trump announced fresh tariffs.

The Canadian prime minister said the imposition of 25 per cent tariffs “will reverberate” and was “unjustified, unwarranted, and in our judgment misguided”.

He announced a reciprocal tariff on US automobiles imported to Canada that did not comply with the existing North American free trade agreement. Carney estimated that this would raise $8 billion.

He declared the “old relationship of steadily deepening integration with the United States” to be over.

“The global economy is fundamentally different today than yesterday,” he said in an address to the nation. “While this is a tragedy this is also the new reality.”

The small African kingdom of Lesotho is to send to a delegation to the US urgently, fearing job losses in its textile industry after President Trump imposed 50 per cent tariffs on imports — the highest for a single nation.

Other African countries hit hard by Trump’s “reciprocal tariffs” above the new baseline rate of 10 percent include Madagascar on 47 per cent, Mauritius on 40 per cent, Botswana on 37 per cent, and Equatorial Guinea and South Africa on 30 per cent.

But Lesotho, which the US administration says is among “the worst offenders” for high tariffs on US imports, will be particularly hard hit because it relies upon textile exports, including jeans.

President Trump’s method of calculating which countries get hit with “reciprocal” tariffs has stunned financial markets and baffled trade experts, who say the methodology would not pass a basic economics exam.

For the past two months, the president has warned that his most senior officials were carrying out an in-depth analysis of the tariffs and non-tariff barriers — such as regulations and taxes — applied by other countries on the United States to calculate the level of “reciprocal” measures the administration would announce this week.

Instead, what emerged from Trump’s Rose Garden announcement that upended the global economic order was a rule-of-thumb estimate economists say has little bearing on real trade barriers or bugbears such as VAT or tech taxes in Europe, which Trump has complained about.

Read in full here.

The German carmaker has temporarily halted imports of vehicles from Mexico and Europe as it rethinks pricing in response to President Trump’s 25 per cent tariffs.

Read in full here.

President Lula da Silva has said that “faced with the decision of the United States to impose an additional tax on Brazilian products, we will take all appropriate measures to defend our companies and our workers”.

The US imposed a 10 per cent tariff on Brazil in Wednesday’s announcement.

Baroness Kidron, who has led a campaign to protect artists’ copyright against AI, has warned that legislation to protect children’s safety online could be sacrificed to reach a trade deal with the US.

“I am torn between weeping and fury and I think it’s important for people to realise that they probably aren’t putting the whole thing on the table and that they’ll scrap it (regulation) altogether, they’re probably negotiating about this bit or that bit”, she told Times Radio.

“But I’ve been involved in this area for a long, long time and I’m involved in cases in the US where they say it’s against freedom of speech to do a risk assessment — not even wanting to do a risk assessment because somehow that impedes the march of tech.

“So I think we have to assume that the government has shown no back backbone at all in relation to online safety for children. They came in promising to actually tighten up the Online Safety Act and so far, everything they’ve done has weakened it. I don’t think it’s safe in their hands. I am so furious that the tears won’t come because actually I know how much this means to families up and down the country.”

President Macron has called for European companies to pause their investments in the US, which made little sense when America was hitting out at Europe.

“What would be the message of having big European players that invest billions in the American economy at the same time they are hitting us,” Macron said. “We must have collective solidarity.”

The French president is in Paris, meeting representatives of business sectors hit by the import tariffs. Among them are the chief executives of the aerospace companies Airbus and Safran.

The government has published a list of US products which could be subject to UK tariffs. Ministers are consulting businesses on how they might be affected, and they have until May 1 to contribute.

The list stretches to thousands of products including chicken, overcoats, plywood, iron, and machinery parts.

“We want to know what you think about the impacts that any future UK tariffs might have, if applied on US goods, in response to the US government’s recent tariff announcements. The information gathered will help the government to assess the scope and impacts of any UK tariff measures that could be applied”, a statement on GOV.UK says.

Europe must respond “industry by industry” to the tariffs imposed by Trump, President Macron says.

Speaking during a meeting with French industry representatives, Macron said that the response to the reciprocal tariffs would be “more massive” than Europe’s earlier retaliation to US steel and aluminium tariffs.

President Sheinbaum attributed Mexico’s absence from the list of nations targeted in President Trump’s latest round of tariffs to her country’s good relationship with the US administration. “That’s good for the country,” she said.

Mexico signed the United States, Mexico and Canada (USMCA) trade agreement in Trump’s first term.

Mexico, however, has been hit by 25 per cent tariffs imposed by the US, which Trump linked to fentanyl and the trafficking of migrants across the border. Sheinbaum said that with greater co-operation, she hoped to reduce these to 12 per cent.

Mexico will be also affected by the proposed 25 per cent tariffs on non-US-made cars. The economy minister said on Thursday that Mexico’s goal in the next 40 days was to achieve the best trade conditions possible in further discussions with the US.

Mel Stride, the shadow chancellor, said the government had to “up its game” and secure a deal with the US to avoid tariffs. “We’re a very open economy, and this will have a serious impact,” he said.

“I think the really disappointing thing is the amount of time that was wasted by this government before it got in the room with the American administration to try and negotiate that vital free trade agreement so that we don’t have to face these tariffs at all.

“What the government has got to do now is up its game and go and get that deal so that we can be spared this tariff.”

American equity markets opened sharply lower because of risings concern that President Trump’s tariffs would tip the world’s largest economy into recession, Emma Powell writes.

The S&P 500 declined 195.26 points, or 3.44 per cent, to 5,475.71, putting the index on course for its worst daily decline in two years, while the technology heavy Nasdaq Composite was down 808.97 points, or 4.6 per cent, to 16,792.07.

Apple, one of America’s most valuable public companies, fell more than 9 per cent in early trading, which put the iPhone maker on course for its largest daily fall since March 2020. Amazon, considered a bellwether for the American economy, declined 7.1 per cent, putting the world’s biggest online retailer on track for its biggest fall since August.

France’s cognac producers urged Europe and the United States to defuse their tariff conflict to avert heavy losses for the French spirits and wines industry, Charles Bremner writes.

“We will very clearly lose market share,” Florent Morillon, president of the National Interprofessional Office of Cognac, said. “For our region and our entire economy, it is a cold shower.”

Sales of French wine and spirits in the United States are expected to drop by at least 20 per cent after Trump’s imposition of 20 per cent tariffs on EU goods.

Cognac, champagne and Bordeaux and Burgundy wines have been hard hit by trade wars in recent years, both with the United States and China. Beijing imposed temporary tariffs on cognac shipments in October in a dispute with the European Union over electric vehicles. China and the United States are the cognac industry’s most important export markets.

The American economy will be most hurt by Trump’s tariffs but the whole world will be made poorer, academics have predicted.

Professor Jonathan Haskel, chair in economics at Imperial College Business School in London, said: “We should remember that the US is a relatively closed economy. British imports are around 30 per cent of GDP, American imports are around 15 per cent, so we must not overstate the impact of unilateral American restrictions on trade on the world. Unless we descend into a full trade war, the economy most hurt by these measures is the American economy.”

Professor Tommaso Valletti, professor of economics at Imperial College Business School, added: “This approach is like spinning a roulette wheel in total darkness. No product is produced uniquely within a single country, as the value chain is distributed across the world.

“Trump’s tariffs will fail to close the trade and budget deficits, raise prices, and make America, the UK, and the world poorer by squandering the gains from trade.”

US stocks have suffered steep falls shortly after opening in New York, as Donald Trump’s tariffs reverberated through the world’s financial markets.

The S&P 500 plummeted by about 3.3 per cent, and Dow Jones tumbled about 2.6 per cent on Thursday afternoon when markets opened on Wall Street.

European and UK indices have also recorded sharp drops in the aftermath of Trump unveiling a range of new tariffs, which are set to significantly impact global trade.

Norway says Donald Trump’s blanket tariffs on global trade may constitute a breach of the treaties that underpin the Nato military alliance, writes Jack Parrock in Brussels.

Attending a Nato meeting in Brussels, Espen Barth Eide, the Norwegian foreign minister, said the tariffs from the White House could breach Nato’s Article 2, which states that allies should seek to remove conflictual elements in their international economic policies, and encourages economic co-operation among themselves.

“If you want a strong Nato, you should ensure that there is as much economic growth as possible in the Nato countries,” Eide said. “That was the insight of those who established Nato, that economic co-operation would be good for the entire alliance.”

But Nato experts say that in practical terms, there are almost no sanctions the other allies could impose on the US for breaching that part of the treaty.

Trump hit Norway with an import tariff of 15 per cent during his so-called “liberation day” announcements on Wednesday.

Sweden’s Volvo Cars, owned by the Chinese company Geely, will increase its production of vehicles in the United States and probably produce an additional model there, after Trump’s introduction of tariffs, its chief executive said.

As of Thursday, cars manufactured outside the United States are subject to a 25 per cent tariff, while a tariff on spare parts is also set to gradually come into effect.

“We will have to increase the number of cars we build in the US, and surely move another model to that factory,” Hakan Samuelsson told Bloomberg.

Volvo Cars assembles its EX90 electric model at its plant near Ridgeville in South Carolina as well as Polestar 3 from its Volvo spinoff. The carmaker “will have to look closely” at which model to add to its production lines, Samuelsson added.

Jonathan Reynolds has addressed some of the speculation around the economic deal with the US that the government is working on.

Responding to questions from MPs, the business secretary said the deal “is about goods and services, and how we recognise each other’s standards” and that for the most part the issues on the table are “trade issues”.

On the threat of US private healthcare interests, Reynolds said there had been “no discussions in relation to the NHS”.

To concerns that digital services tax could be cut, he said the government is committed to making sure any tech company pays a “fair rate” of taxation in the UK.

Reynolds brushed aside concerns that the Online Safety Act could be watered down. The prime minister also said it is in the national interest to ensure young people are safe online.

The Trump administration believes US goods trade deficits have “hollowed out” the US manufacturing base.

The tariffs are billed as restoring “fairness” after the US was “plundered” by a swathe of countries imposing tariffs and other trade barriers.

The administration believes tariffs will boost American manufacturing, lead to better-paid jobs, incentivise the purchase of domestically produced goods and drive economic growth.

The White House has also noted that reciprocal tariffs were a key part of Trump’s election campaign.

Asked if the high tariff regime was temporary, JD Vance promised other moves to ease prices like deregulation and tax cuts but warned “we are not going to fix things overnight”, David Charter writes.

Vance stressed his empathy with working-class Americans, having grown up poor himself.

“We know a lot of Americans are worried,” he told Fox & Friends. “So we are fighting very hard to bring prices down. We’re gonna have the biggest deregulation in the history of this country. We’re doing a lot of things and already have done a lot of things to lower the cost of energy.”

The kicker came a little later in the interview after Vance had set out all the measures he said would boost the spending power of Americans.

“What I’d ask folks to appreciate here is that we are not going to fix things overnight,” he said. “Joe Biden left us with the largest peacetime debt and deficit in the history of the United States of America, with sky-high interest rates.”

He also appeared to concede that US inflation would increase as a result of the tariff policy. “We’re going to cut your taxes, you’re going to have more money in your pocket and that’s of course going to help you deal with the cost of inflation,” he said.

President Trump had the capitals lock stuck on again this morning as he took to his Truth Social site to talk up his tariffs, David Charter writes.

“THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING. THE PROGNOSIS IS THAT THE PATIENT WILL BE FAR STRONGER, BIGGER, BETTER, AND MORE RESILIENT THAN EVER BEFORE. MAKE AMERICA GREAT AGAIN!!!”

There was no word on the recovery time for the patient, however.

The products that could be hit by tariffs if the UK decides to retaliate to Trump’s measures include whiskey, motorcycles and jeans.

The government produced the list alongside its consultation into potential UK retaliation and said inclusion does not mean the product will definitely appear in a UK tariff response.

The document of products is 417 pages long.

JD Vance issued a robust defence of tariffs

SAUL LOEB/AFP VIA GETTY IMAGES

JD Vance said he would make his argument “crystal clear”, David Charter writes.

“We borrow money from Chinese peasants to buy the things those Chinese peasants manufacture. That is not a recipe for economic prosperity. It’s not a recipe for low prices and it’s not a recipe for good jobs.”

Vance told Fox & Friends: “Right now President Trump is taking this economy in a different direction. He ran on that. He promised it and now he’s delivering.”

He said: “Yes this is a big change. I’m not gonna shy away from it, but we needed a big change. We cannot keep going down the Joe Biden globalist pathway where we have two trillion dollars of peacetime debt and deficits. We have manufacturing disappearing. That is not working for Americans. We’ve got to take this country in a different direction.”

JD Vance, the US vice-president, gave a robust defence of the tariffs this morning, framing them as a fundamental reorientation of the American economy, David Charter writes.

Vance addressed fears of price rises by pointing to President Trump’s first term when “we had a 1.5 per cent inflation, we had the fastest growing economy in a generation and we had the beginning of a manufacturing renaissance in the United States of America. Then of course we had four terrible years of the Biden administration”.

He framed the tariffs as a major policy, which suggests they are here to stay.

Vance told Fox & Friends: “I think it’s useful for all of us to step back and ask ourselves ‘What has the globalist economy gotten the United States of America?’ And the answer is fundamentally it’s based on two principles — incurring a huge amount of debt to buy things that other countries make for us.”

Employers could use tariffs as an excuse to push down pay, the Unite general secretary has warned.

Sharon Graham said: “It is likely that some employers will now use the issue of tariffs at the bargaining table, in an attempt to push down pay.”

She said UK workers and industry must be protected. Unite has suggested an immediate reduction in industrial energy prices, that the steel industry be designated a critical national infrastructure, and a commitment to buy British goods.

Taiwan said on Thursday that US tariffs levied on the island were unreasonable and it would discuss them with Washington, partly blaming US curbs on China in Trump’s first term for driving the trade imbalance.

On Wednesday Trump announced that Taiwan, which runs a large trade surplus with the United States, will have a 32 per cent duty placed on its products.

The US tariffs, however, do not apply to semiconductors, which is a major Taiwan export.

“We feel that these measures are unreasonable, and we are also worried about the possible impact on the global economy,” President Lai Ching-te said on his Facebook page, after meeting with senior cabinet members to discuss how to respond. He did not mention imposing reciprocal tariffs.

Taiwan’s exports to and trade surplus with the United States have increased because of the country’s demand for semiconductors and artificial intelligence-related products, as well as Trump’s first-term tariffs and controls on China, the island’s government said.

This resulted in “the shift of Taiwan’s supply chain back to Taiwan and an increase in US demand for Taiwan’s information and communications products, reflecting the huge contribution of Taiwan to the US economy and national security”, the cabinet said.

Sir Keir Starmer has said it would not be “wise” to tell the EU how to respond to Donald Trump’s tariffs.

The prime minister was asked if he would urge the EU to take a less “combative approach” to avoid a trade war.

“Well, in my experience, it’s not wise to go around telling other countries what they should or shouldn’t do,” he said.

“Everybody needs to act in their own best interest. And no doubt they will do so.
“My job is to lead the United Kingdom through this focused on our best interest.”

The prime minister said it is in the national interest to make sure young people are safe online when asked whether online safety concessions could be in a US deal.

Sir Keir Starmer said he had “made it clear” how important he thinks online safety is and mentioned a round table he had with the writer and co-producer of the Netflix series Adolescence on Monday which he said reinforced the risks of social media to young people.

“We will act in national interest but it is also in national interest to make sure young people are safe when online,” he added.

The European Commission, which leads the EU’s trade policy, said this week that the bloc would take a two-pronged approach in responding to the full extent of Trump’s customs duties.

First will come the previously announced response to the steel and aluminium tariffs, while a second set of measures will be unveiled at a later stage — “before the end of April”, according to France.

The French government spokeswoman Sophie Primas went further on Thursday to say that the EU response would also “attack online services”, although she stressed the bloc’s riposte was still being negotiated among member states.

The response could also concern “access to our procurement contracts”, Primas said.

“Everything is on the table,” the German economy minister Robert Habeck added. “The big tech companies have an incredible dominance in Europe and are largely exempt from European taxes,” he said.

Sir Keir Starmer chaired a roundtable with UK business leaders in Downing Street earlier today

BEN STANSALL/REUTERS

Sir Keir Starmer has said that the government is “turbocharging” changes to ensure a strong economy.

The prime minister said that for a while now the government has been talking about a “new era on defence and security” and now we are at a similar point for the trade and economy.

Answering questions from reporters, he said: “This is not a short-term tactical exercise. We have to understand the changing world when it comes to trade and economy.”

He added: “We have to adapt in ways that go beyond the mere question of tariffs. That is why I have instructed my team to go further and faster in what we need to do to put more resilience and strength into our economy.”

It is too soon to know if President Trump’s trade war will force tax rises in the autumn, Jonathan Reynolds, the business secretary, has said.

Pressed to clarify how the tariffs announced on Wednesday would affect the chancellor’s headroom against her fiscal rules, Reynolds replied: “The impact on the UK is not just about the direct relationship between the US and the UK, but what happens in the wider global trading system.

“How other countries choose to react to the announcements in the US will be the determining factor for the impact upon the UK, and we will not know that at this stage.”

British trade with the US could ultimately improve as a result of an economic deal, Jonathan Reynolds, the business secretary, has argued.

“I believe we could seriously get to a position where we’re not only avoiding the imposition of additional trade tariffs and barriers, we could be deepening our trade relationship and removing some of the barriers that already exist, particularly in trade in services,” he said.

“So that is the objective of the government.”

Jonathan Reynolds, the business secretary, made the assertion while rejecting comparisons with countries such as Kosovo and the Christmas Islands that have also been hit by the base 10 per cent tariff rate by President Trump.

He said that although he was “disappointed” with tariffs those countries “do not have the kind of complex trading relationships we have with the United States”.

Reynolds said: “I look at the EU, which faces a tariff of 20 per cent; Japan, 24 per cent; India, 26 per cent, and I look at the 25 per cent tariffs already in place on Canada and Mexico, so, yes, we are in a more favourable position compared to those key friends and allies, but we must go further.”

Pedro Sanchez said the EU should create an aid fund financed with revenue from tariffs on the US

REX

Pedro Sanchez, the Spanish prime minister has announced a €14.1 billion trade response and revival plan designed to mitigate the negative impacts of the trade war initiated by President Trump’s administration (Isambard Wilkinson writes).

Of the billions that this plan will mobilise, €7.4 billion will be new funding and another €6.7 billion will be used from existing instruments to protect companies and workers, and to reorient Spanish productive capacity.

The European Union should create an aid fund financed with the revenue from the tariffs on the United States, Sanchez said during his speech at the Moncloa Palace in Madrid. The EU warned this morning that it is prepared to respond to the generalised tariffs announced by the US, but extended its hand to negotiate a way out.

Carlos Cuerpo, the minister of economy, who described the tariffs as “unfair and unjustified”, said he was in favour of a negotiated solution to the trade war that Trump has opened, but warned that “if there is no room for negotiation, we will have to respond”.

The fall occurred after President Trump sent US tariffs up to their highest level in more than a century, Jack Barnett writes.

In London, the FTSE 100 slid by 1.35 per cent, or 116.32 points, to 8,492.17, while the domestically focused FTSE 250 index dropped by 0.78 per cent, or 152.99 points, to 19,496.64.

Europe’s foremost stock indices suffered heavier blows during early trading. Germany’s Dax index tumbled by 1.61 per cent and France’s Cac 40 slipped by 1.85 per cent. The pan-European Stoxx 600 index declined by 1.42 per cent.

Overnight trading in Asia saw intense selling: Japan’s Nikkei index dropped by 2.77 per cent, Korea’s Kospi shed 0.76 per cent and China’s CSI 300 fell by 0.59 per cent. Thailand’s SET 50 index slid by 1.34 per cent, while Australia’s ASX 200 dropped by 0.94 per cent.

European government bonds rallied on Thursday as traders raised their bets on central banks cutting interest rates to offset the damaging growth impacts of Trump’s global tariffs. The yield on the benchmark 10-year UK government bond dropped by 10 basis points to 4.559 per cent, while the rate on the German equivalent fell by 6 basis points to 2.645 per cent.

Britain will set out an “indicative list” of products that could be hit by tariffs if the US will not sign a trade deal, the business secretary has said, Chris Smyth writes.

Jonathan Reynolds said he wanted to give business “the chance to have their say and influence the design of any possible UK action”, which it would set out “alongside an indicative list of potential products that the government consider most appropriate for inclusion”.

He pledged to “support businesses through this” by ensuring they were kept informed, although stopped short of offering financial support.

Britain could press ahead with retaliatory tariffs with the US if an economic deal cannot be reached, the business secretary has said, Chris Smyth writes.

Jonathan Reynolds said “intensive” talks would continue, saying that “a deal is not just possible, it is favourable to both countries” and would be “the best route to economic stability”.

He rejected “simple answers and loud voices” saying: “While some urge escalation, I simply will not play politics with people’s jobs. This government will strive for a deal that supports our industries and the well-paid jobs”.

However, he stressed: “We do reserve the right to take any action we deem necessary if a deal is not secured”. A consultation with business about retaliatory action was “a formal step necessary for us to keep all options on the table”, Reynolds said. This four-week consultation on retaliatory tariffs would be “paused” if a deal was reached, he said.

The UK government is opening a consultation on the implications of possible retaliatory action by the UK.

Jonathan Reynolds, the business secretary, said the government is seeking the views of British businesses on the implications of possible retaliatory action.

Jonathan Reynolds speaking in Parliament

PRU/AFP VIA GETTY IMAGES

This will be done over the next four weeks on products that could be included in any UK tariff response, he said.

Should the government agree an economic deal with the US “that lifts tariffs”, then that consultation would be paused, he said.

President Trump has succinctly explained reciprocal tariffs as: “They charge us, we charge them”.

On Wednesday he explained: “Reciprocal. That means they do it to us and we do it to them. Very simple, can’t get any simpler than that.”

His administration has identified perceived unfair tariffs and other trade barriers imposed on the US by other nations and Trump has decided to respond in kind.

In reality, Trump’s tariffs are not exactly like-for-like with many of his tariffs approximately half of those he claims to be charged to the US.

For example, the Trump administration claims China charges 67 per cent tariffs to the US but in return it will charge 34 per cent.

François Bayrou, the French prime minister, called the Trump tariffs a disaster for the United States.

“This decision is a disaster for the economic world. It’s an immense difficulty for Europe. I also think that it is a disaster for the United States and for American citizens,” the prime minister told a conference at the senate in Paris.

The French foreign minister, Jean-Noel Barrot, said they would hit the economies of Nato member states.

“These will have negative consequences on the American economy, and on the economies of the alliance’s members as a whole,” he told reporters as he arrived at a Nato meeting in Brussels.

The pound and euro rose sharply against the dollar, driven by fears that Trump’s historic imposition of tariffs on countries around the world may tip the US and global economy into recession, Jack Barnett writes.

The pound surged by 1.21 per cent to $1.31 on Thursday and is now up by more than 5 per cent against the greenback so far this year. The euro strengthened by 1.44 per cent to $1.10 and has also gained more than 6 per cent against the dollar in the past four months.

The dollar index, which measures the greenback against six comparable currencies, dipped by 1.38 per cent and is down by 5.78 per cent since the start of the year.

Chris Turner, head of FX at the Dutch bank ING, said: “The blowback of US tariffs onto the US domestic economy leaves the dollar naked.”

Trump’s tariffs are essentially a tax on imports with the aim of boosting American manufacturing.

The idea is that tariffs increase the price of imported goods, thereby incentivising consumers to purchase domestic products instead.

Trump insists that tariffs are paid for by foreign countries but it is importers that pay them and the money goes to the US Treasury. Those companies typically pass their higher costs on to customers in the form of higher prices.

Things get more complicated from there, with the potential of impacted countries responding with their own tariffs, the issue of some domestic producers relying on imports in their supply chain and the potential for rising inflation.

The Trump administration has complained about the UK’s higher animal welfare and environmental standards, which prevent US meat producers exporting chlorine-washed chicken and hormone-treated beef to Britain, Adam Vaughan writes.

“The UK maintains non-science-based standards that severely restrict US exports of safe, high-quality beef and poultry products,” the White House said in a statement.

Chlorine washes are used on chicken carcasses to remove bacteria, a practice that is banned in the UK. Nigel Farage, the Reform leader, angered British farmers last week by suggesting the UK should allow imports of US chlorinated chicken. “Label things, let consumers decide,” he said.

More than 90 per cent of US poultry producers no longer use chlorine, but many American meat producers still use antimicrobial washes, according to the UK National Farmers Union. In previous trade deal negotiations, the US has strongly pressed the UK on agricultural exports to Britain.

Tom Bradshaw, president of the union, urged the UK government to block imports of US meat made to lower standards. “It should be a barrier, a red line which cannot be crossed. This is a moment of reckoning here, for what is it the UK stands for.”

The Irish government will “engage intensively” with Northern Ireland on the impact of Trump’s tariffs, the Irish deputy premier said.

Simon Harris said he spoke with Northern Ireland’s first minister, deputy first minister and economy minister on Wednesday and they agreed “to keep in very close contact”.

“Northern Ireland is obviously in a distinct and unique position — we all know why — and it’s important we work our way through those scenarios,” he said.

After Brexit, Northern Ireland continues to follow the EU’s rules in some areas of trading due to the Windsor Framework arrangement. Concerns have been expressed about what happens in Northern Ireland if the EU brings in countermeasures to Trump’s tariffs.

The UK has not had any “special treatment”, the shadow home secretary has said.

Chris Philp told LBC: “Dozens and dozens of countries have the same 10 per cent tariffs on all goods and 25 per cent on cars, just the same as us — from Costa Rica to Colombia, from Peru to Paraguay. So we’re not getting any special deal or special treatment.”

He added: “This is really bad for our economy. It’s going to put jobs and growth at risk.”

Philp specifically highlighted the automotive sector, which he said was “hugely at risk” and already “reeling” from Labour’s policy on electric cars and “Ed Miliband’s crazy energy policy”.

Labour have introduced a mandate for electric vehicles to constitute a certain percentage of a brand’s new vehicle sales, rising each year to 2035 when all new vehicles must be zero-emission.

The idea of making nations pay for the privileges of US trade was a theme even before Trump’s earliest forays into politics, culminating in his announcement on Wednesday.

• Read in full: Trump’s life has been a battle to dominate the playground

Donald Trump portrait on 5th Avenue outside of Trump Tower. NYC 1987

JOE MCNALLY/GETTY IMAGES

Singapore was disappointed to be slapped with US tariffs of 10 per cent despite the wealthy Asian financial hub having a free-trade agreement and running a bilateral trade deficit with the United States, Singapore’s trade minister said on Thursday.

Singapore could take countermeasures under the free-trade agreement in force since 2004, but has chosen not to do so, Gan Kim Yong, the trade minister, told a press conference.

“Retaliatory import duties will just add cost to our imports,” he said, noting that the government would be reviewing its economic forecasts because of the worsening situation.

Gan said Singapore will try to engage the US to understand President Donald Trump’s areas of concern and see if they can be resolved.

“If there are no specific concerns, then it’s more difficult to argue or to negotiate,” he said. Singapore was hit by Trump’s 10% base tariff on imports.

Giorgia Meloni, the Italian prime minister, came out strongly against Trump’s tariffs last night but declined to confirm whether she would join a common EU response or seek a bilateral discount from the US.

She could have her chance to achieve the latter when the US vice-president, JD Vance, pays her a visit in Rome, reportedly on April 19. The visit will also give Meloni a chance to try and re-establish her role as a bridge between the EU and the US.

She has already said she agrees with Vance’s argument that Europe has lost its democratic mission, given its habit of cancelling elections.

But the pressure is on her to negotiate a tariff discount. Trump’s 20 per cent for the EU could wreak havoc with Italy’s food and wine sector, which Meloni keenly promotes as a badge of Italian identity.

Italian prosecco producers have reported a 51 per cent rise in US sales in the last four years, reaching more than 124 million bottles a year, accounting for 19 per cent of Italy’s entire prosecco output.

Meloni’s office said she had “cancelled her scheduled engagements today, so that she can focus her attention on the actions to be taken”.

The tariffs announced by Trump will put a strain on the United States’ exports as well, said Olaf Scholz, the German chancellor.

At a press conference in Berlin, Scholz also pointed to complex supply chains: “Sometimes there are so many supply chain dependencies that some things are sent back and forth a 100 times. You cannot simply stop that.”

He added: “Even if Europe did nothing [in response], it would lead to economic difficulties in the US.”

The immediate impact of the tariff in the UK will be a rise in costs for firms selling to America, meaning cost cutting and job losses for those businesses, Ali Hussain writes.

A global trade war could also mean higher prices for consumers, which is likely to push up inflation.

This means interest rates will remain higher for longer, which is bad news for mortgage customers but a boon for savers. However, the Bank of England could cut interest rates to bolster the economy to stave off recession.

For investors, UK shares plunged sharply during early trading on Thursday, but the UK’s relatively low tariff compared with others could give firms here a competitive advantage in the longer term.

Demand for safe haven assets like gold has surged, and the precious metal hit a record high this week. Slowing global trade could also mean lower oil prices, which is good news for energy bills, particularly for those who rely on heating oil.

India has reacted phlegmatically to a 27 per cent tariff, disappointed that Trump’s good personal rapport with the Indian prime minister, Narendra Modi, failed to result in a lower rate, Amrit Dhillon writes.

Announcing the tariff on Wednesday, Trump described Modi as a “great friend of mine” but added: “India, very, very tough… you’re not treating us right.”

An Indian official told the Press Trust of India: “It’s a mixed bag and not a setback for India.”

Nonetheless, the Modi government had hoped for better given that India has already made concessions, pledged to buy more American defence equipment and agreed to negotiate a new bilateral trade deal.

Delhi also maintained a stoic silence and avoided any criticism of Trump’s immigration policies when Trump flew illegal Indian immigrants back to India.

South Africa was hit with a tariff double-whammy after the US imposed a 30 per cent tax on goods from the country and a 25 per cent global levy on automobiles, which are a core component of the country’s US trade, Jack Denton writes.

Analysts had not expected such high tariffs on South African goods, but the move comes amid deteriorating relations between Washington and Pretoria, with the US expelling the South African ambassador last month over perceived anti-Trump remarks.

The US is South Africa’s second-largest trading partner after China, with $13 billion in exports to America as of 2023, according to the Observatory of Economic Complexity. $4.8 billion of that was metal commodities — which can be sold anywhere and are less impacted by the tariffs — but $1.6 billion were cars, according to the OEC.

The South African trade minister, Parks Tau, said earlier this week that they were seeking a meeting with US authorities on auto tariffs in particular.

Trump’s sanctions affect almost the whole world. But Russia, one of Washington’s greatest international adversaries, is markedly absent, Tom Parfitt writes.

Karoline Leavitt, the White House press secretary, told Axios on Wednesday that Russia was left off because US sanctions over the Ukraine war “preclude any meaningful trade” with Moscow.

Cuba, Belarus, and North Korea were also left off the list, because tariffs and sanctions against them are already high, a White House official told the New York Times.

Trump’s “Make America Wealthy Again” trade announcement event in the Rose Garden at the White House

CHIP SOMODEVILLA/GETTY IMAGES

“Russia and Belarus, we don’t trade with, they’re sanctioned,” Scott Bessent, the US Treasury Secretary, told Fox News.

US-Russia trade fell from about $35 billion in 2021, the year before President Putin announced Russia’s invasion of Ukraine, to $3.5 billion last year.

Axios noted that the US still trades more with Russia than with countries like Mauritius or Brunei that did make Trump’s tariffs list. Ukraine was handed a 10 per cent tariff, the same as the UK.

The Middle East has been buffeted by US policies in the past, but new tariffs will have less of an immediate impact on the region than some others, Samer Al-Atrush writes.

The US enjoys a trade surplus with the region that reached $19.1 billion in 2024, an almost 40 per cent increase on the previous year. The region’s strongest economies — the energy producing Gulf states — have their currencies pegged to the dollar and were each hit with the minimum 10 per cent tariff.

Israel, which ran a trade surplus with the US in 2024, has also been hit with a 17 per cent tariff, although it had tried to rescind its tariffs in the hope that the US would not retaliate. It comes as bad news for the country’s electronics industry, its top export to the US that amounted to almost $4 billion last year, followed by precious stones at $3.5 billion.

“We are in shock,” an Israeli journalist quoted an economic official as saying. “We were sure that the decision to completely cancel tariffs on imports from the US would prevent this move. But it didn’t happen.”

Shares in Nike, Adidas and Puma dropped sharply on Thursday after Trump imposed a raft of new tariffs on Vietnam, Indonesia, and China, which are key sourcing markets for the sportswear companies.

Vietnam was targeted with a 46 per cent tariff rate, Cambodia with 49 per cent, Bangladesh with 37 per cent and Indonesia with 32 per cent, while Trump hiked tariffs on China by an extra 34 percentage points, after earlier 20 per cent tariffs.

The tariffs could wipe more than 10 percentage points off margins across the sector, as well as hitting sales as inflation worries dent consumer spending, said Felix Dennl, analyst at Metzler in Frankfurt.

“Sporting goods companies are likely to respond with price hikes in the US,” Dennl said.

Frankfurt-listed shares of Nike were down 6.5 per cent on the day, while Adidas shares dropped 9 per cent to an almost one-year low and Puma shares fell 8.5 per cent, hitting their lowest level since November 2016.

London’s leading share index has slid lower, with the FTSE 100 dropping 0.8 per cent to 8,532. The fall was not as much as European stock markets because the 10 per cent duty on UK exports to America was less than the duty imposed on EU exports, Martin Strydom writes.

Diageo, the maker of Johnnie Walker whisky, Smirnoff vodka and Guinness stout, bounced 2.8 per cent in a relief rally. The shares have fallen 17 per cent so far this year on concerns about the impact of tariffs.

Financial and mining stocks dragged down the index on concerns about whether the tariffs will slow global growth. Funds that invest in technology companies — Polar Capital Technology Trust and Scottish Mortgage Investmente Trust — were also lower after shares in Apple and the AI chip maker Nvidia dropped in after-hours trading.

A weaker dollar lifted the pound to $1.314, the highest since last October.

Donald Trump’s crude and arbitrary calculation on which countries to hit with his “reciprocal” tariffs has stunned financial markets and baffled trade economists, Mehreen Khan writes.

The president had promised his trade officials would carry out an in-depth analysis of all the tariffs and non-tariff barriers applied by other countries, to calculate the level of retaliation the administration would apply on April 2. Instead, what we got last night in the Rose Garden was a rule of thumb estimate that has little bearing on actual trade barriers or issues like VAT, which Trump has complained about.

The administration’s method involved taking a country’s bilateral trade deficit with the US, and dividing that figure by its level of exports to the US. This is why some tiny economies like Lesotho have been hit with eye-watering levies above 50 per cent and why the effective rate on China is now about 54 per cent.

The bizarre use of this rule of thumb is one of the reasons that the value of the dollar has weakened sharply overnight.

Norway will seek to negotiate with the United States, the Norwegian prime minister, Jonas Gahr Støre, told the public broadcaster NRK on Thursday.

Trump announced a 15 per cent tariff on goods imported to the US from Norway.

“This is bad news, it is very serious,” Støre told NRK.

“There is an opening for negotiations here, the Americans say, and we will use that in every possible way that we can.”

Norway, which is not a member of the European Union, has said it is lobbying EU policymakers to prevent what it called a worst-case scenario in which Norwegian exports to Europe could become negatively affected by a union response to US tariffs.

“Even the Taliban got a better deal than Starmer,” an SNP official has complained.

According to figures provided by the Trump administration, Afghanistan charges 49 per cent tariffs on the US (including other trade barriers) but is being charged the same reciprocal tariff as the UK — 10 per cent — despite the UK being listed as charging 10 per cent on the US. The official was speaking to Politico.

The small African nation Trump said “nobody has ever heard of” will be among the countries most affected by new US tariffs.

Lesotho, a landlocked kingdom encircled by South Africa, has been hit with a 50 per cent reciprocal tariff by the US, a measure that will significantly impact the economy of one of the world’s least developed countries.

America primarily buys diamonds as well as suits and other clothing from Lesotho, which exported $223 million to the US in 2023, according to the Observatory of Economic Complexity. That accounts for some 10 per cent of the country’s gross domestic product (GDP).

The 50 per cent tariffs on Lesotho are “cruel,” Charlie Robertson, head of macro strategy at the emerging and frontier markets fund manager FIM Partners, wrote in a post on social media site X. “It’s going to knock their GDP by at least 1 per cent.”

Trump has introduced a new baseline 10 per cent US tariff on goods from all countries and higher reciprocal tariff rates for countries that his administration says have high barriers to US imports.

The numbers, he said, are “approximately half of what they are and have been charging us”, pointing out the steeper rates are tailored to those countries Washington deemed as bad actors.

Trump’s reciprocal rates are meant to capture not only how much other countries tax US exports, but also non-monetary tariffs including policies such as restrictions on trading, currency manipulation, lax pollution, labour laws and burdensome regulations that keep US products out of foreign markets.

There are some exemptions, as goods like copper, pharmaceuticals, semiconductors, lumber, gold, energy and “certain minerals” will not be subject to reciprocal tariffs, according to a White House fact sheet.

Germany’s vice-chancellor and economics minister has warned that the Trump administration’s “tariff mania” risks giving rise to a spiral of retaliation that could “drag countries into recession and cause massive damage around the world”, Oliver Moody writes.

“For consumers in the US, the day will not be Liberation Day, but rather Inflation Day,” Robert Habeck said.

Bernd Lange, a German Social Democratic MEP who leads the European parliament’s trade committee, said the package amounted to an economic “declaration of war” and would cause tens of billions of euros’ worth of damage to the EU.

Currency traders assess the fallout in South Korea

AHN YOUNG-JOON/AP

Six of the nine Southeast Asian countries listed by Trump were slapped with much bigger-than-expected tariffs of between 32 per cent and 49 per cent.

Pham Minh Chinh, the Vietnamese prime minister, created a task force to address the situation after an urgent cabinet meeting early on Thursday, state media said. He noted the country’s 8 per cent growth target for this year remained unchanged.

Thailand’s prime minister, Paetongtarn Shinawatra, said she hopes to bring down the 37 per cent rate imposed on her country, which was far greater than the 11 per cent it had expected.

“We have to negotiate and get into details,” she said. “We can’t let it get to where we miss our GDP target.”

Malaysia, which was given a tariff rate of 24 per cent on exports into the US, announced it would not seek retaliatory tariffs and it said the trade ministry would be actively engaging with US authorities “to seek solutions that will uphold the spirit of free and fair trade.”

The UK was given a “special rate” on tariffs thanks to Brexit, an adviser to Donald Trump has said

Seb Gorka, a White House adviser on counterterrorism, said the tariff on British goods could “improve”.

“After Brexit, you’ve reaffirmed your independence, and I think that is being proven today by the special rate that has been afforded to the UK,” he told BBC’s Newsnight.

He added that there was “nothing to say that the current rate … could not improve. It is the beginning.”

BEN STANSALL/REUTERS

Sir Keir Starmer will try to reassure British businesses at a meeting in Downing Street this morning.

The prime minister can breathe a sigh of relief that British goods were hit with a 10 per cent tariff, lower than the 20 per cent levy imposed on EU exports.

Trump appears to have applied a sweeping formula: dividing the US trade deficit with a country by the imports from that country. Then, Trump halved the number produced because he was being “kind”. For those countries with a trade surplus, he simply imposed a 10 per cent tariff.

Given the blanket approach adopted by Trump, it appears that Britain was treated no differently from the rest of the world and the real test of Starmer’s diplomacy will come in the weeks ahead.

Britain is trying to negotiate a bespoke trade deal with the US, focussing on technology and AI.

Starmer could also offer to lower tariffs on US beef, chicken and other meat— without changing standards to allow imports of hormone-treated beef and chlorine-washed chicken. In exchange, he will hope that Trump drops the tariffs on British goods.

The business secretary said the 10 per cent tariff on the UK is “not a fair reflection” of our trade.

Jonathan Reynolds told BBC Breakfast that the average tariff the UK has in place on US goods is “about 4 per cent”.

But Reynolds also acknowledged that the US “have an argument that there are other barriers to trade”.

“For example we have a food standards regime in the UK which they have some objections to,” he noted.

However, he added that the two countries have a “strong trading relationship” which is “fair and balanced”.

The French government spokeswoman, Sophie Primas, said this morning that France would continue to try to negotiate with Washington “because we are not the ones who started this commercial war”.

“There will first be discussion and then the riposte,” Primas, a government minister, told RTL radio. “With President Trump, you have to get into a trial of strength”

Just before the announcements of the tariffs, President Macron said he hoped Trump would reverse his decisions, which were “not a good idea politically or geopolitically”.

“There’s a paradox in the main allies of the United States becoming the first ones to be taxed,” he added.

Sir Keir Starmer vowed to “fight for the best deal for Britain”.

Addressing business chiefs including AstraZeneca’s Pascal Soriot, BAE’s Charles Woodburn and Jaguar Land Rover’s Richard Molyneux, he repeated that “nobody wins in a trade war” and negotiations on an economic deal continue.

“Our intention remains to secure a deal, but nothing is off the table,” he said.

“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.”

The business secretary said being an open trading nation is “really important to our prosperity”.

He told Sky News: “America is a friend, America is our principal ally. We might not agree and don’t agree with all of these decisions but you’ve got to understand where they’re coming from and when you have that you have the basis for a constructive conversation that will get the best for the UK.”

President Macron has called an emergency meeting of business leaders at the Élysée Palace to assess the damage to France from the tariffs President Trump has slapped on Europe.

Paris is pushing for a robust riposte from Brussels to tariffs that will hit French drink and agricultural exports hard as well as industrial goods. Sales of French wine and spirits in the United States are expected to drop by at least 20 per cent.

Sophie Primas, the government spokeswoman, said Trump’s tariffs
would lead to “major economic disorder not only in Europe but also in the United States”.

Le Parisien newspaper said the imposition of tariffs did not mark Liberation Day, as Trump called it, but more The Day After, the disaster film about the destruction of the world in a US-Soviet nuclear war. “April 2, 2025, will go down as the day that a stroke of the hand by the most powerful man in the world swept away the world economic order as we have known it since the end of the Second World War.”

Todd McClay, New Zealand’s trade minister, has struck an optimistic note as he said the new 10 per cent tariff it was facing meant its exports remain competitive in the US market, compared with nations hit by higher tariffs.

McClay said it was important to note many countries were facing much higher tariff rates than New Zealand, which is a large exporter of lean beef used in US hamburgers.

“It’s very clear that the US, although they’re putting a tariff rate in place, has viewed New Zealand and our trading relationship as well balanced”, he said.

Tariffs are “not good for trade” and were likely to impact inflation, demand, and some currency rates, the minister added.

“We’ll be working very closely to our exporters during the course of today to get as much information as we can so that we can be well prepared in that market.”

A currency trader reacts to tariffs in South Korea

AHN YOUNG-JOON/AP

Stock markets and the dollar fell in overnight trading, with investors switching to safe havens. The pound rose against the dollar to $1.307 and Japan’s yen strengthened as foreign exchange traders looked for safety outside the dollar. Safe-haven buying pushed gold to a high above $3,160 an ounce at one stage before the price eased back to $3,132.35, Martin Strydom writes.

Japan’s Nikkei lost 3 per cent, with shippers, banks, insurers and exporters leading the sell-off. Shares fell in South Korea and Australia. The FTSE 100 is forecast to open 1.7 per cent lower and Germany’s Dax down 2 per cent.

Apple, which makes iPhones in China, had $240 billion wiped off its market value as its shares fell 7 per cent in after-hours trading. Nvidia, which manufactures chips in Taiwan, fell by 5.6 per cent, or $153 billion. Imports from China face tariffs of 34 per cent and 32 per cent from Taiwan.

There will be an economic impact from President Trump’s actions last night, the prime minister has said.

Sir Keir Starmer told business chiefs in Downing Street: “Last night the president of the United States acted for his country, and that is his mandate. Today, I will act in Britain’s interests with mine.”

“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally,” he admitted.

“But I want to be crystal clear: we are prepared, indeed one of the great strengths of this nation is our ability to keep a cool head.”

Starmer promised that he would only strike a deal with the US “if it is in our national interest and if it is the right thing to do for the security of working people, protects the pound in their pocket that they have worked hard to earn”.

China urged the United States to immediately cancel its latest tariffs and vowed countermeasures to safeguard its own interests, after the country appeared to be facing a cumulative 54 per cent surcharge on its exports into the US.

On Wednesday Trump announced China would be hit with a 34 per cent tariff, on top of the 20 per cent he imposed earlier this year, bringing the total close to the 60 per cent figure the US president had threatened while on the campaign trail.

The Chinese commerce ministry said in a statement that Trump’s move to impose sweeping tariffs disregards the balance of interests reached in multilateral trade negotiations and negated the benefits of international trade.

“China firmly opposes this and will take countermeasures to safeguard its own rights and interests,” the ministry said.

Economists have warned that a trade war between the two largest economies could seriously affect global supply chains.

The business secretary said the UK has “modelled every scenario” for the impact of tariffs but it is “not just about the relationship between the UK and the US, but what is going on in the rest of the world”.

A timeline for the UK to seal an economic deal to mitigate tariffs is “largely in the gift of the US”, he said.

Reynolds said: “We have every scenario you could imagine planned for but we also have a plan in place to stay calm, to talk to the US, to continue our work, to make sure that we are getting the best for the UK and working with all friends and allies as a way through this, rather than let the rhetoric overcome us, let the siren calls to make this even worse be listened to.”

US tariffs on the UK are a “disappointment” and “a challenge”, the business secretary has said.

Jonathan Reynolds told Times Radio: “Any barrier to trade, particularly between the UK and our major trading partner, which the US is, is a disappointment to me. It’s a challenge.

“So, I recognise that the UK is in a better position than a lot of other countries from what was announced last night, but I was still disappointed.”

Volkswagen is planning to introduce an “import fee” on vehicles affected by the 25 per cent tariffs imposed by the US on cars made outside the US, the Wall Street Journal reported.

The German carmaker has temporarily halted rail shipments of vehicles from Mexico and will hold cars arriving by ship from Europe at ports, the report said, citing a memo to retailers.

Trump’s 25 per cent tariffs on the global automotive industry will cover more than $460 billion worth of imports of vehicles and auto parts imports annually, according to Reuters.

Volkswagen told its dealers that it would give more details by mid-April on pricing strategies for tariff-affected cars, and plans to begin allocating those vehicles to stores by the end of the month, the WSJ report said. “We want to be very transparent about navigating through this time of uncertainty,” Volkswagen told the Journal.

Meloni: “We will do all we can to reach a deal with the US”

LAPRESSE/ALAMY

In Rome, Giorgia Meloni condemned Trump’s 20 per cent tariffs on European imports.

“The introduction by the US of tariffs against the EU is a measure I consider mistaken and of no benefit to either side,” the Italian prime minister posted on Facebook after Trump’s White House press conference.

“We will do all we can to reach a deal with the US with the aim of avoiding a commercial war that would inevitably weaken the West and favour other global actors,” she added.

The Spanish leader, Pedro Sánchez, said: “Spain will protect its companies and workers and will continue to be committed to an open world.”

Japan also described the tariffs as “extremely regrettable”, adding that they they may break World Trade Organisation rules and the bilateral trade agreement between the two countries.

“I have conveyed that the unilateral tariff measures taken by the United States are extremely regrettable, and I have again strongly urged [Washington] not to apply them to Japan,” Yoji Muto, the trade and industry minister, told reporters.

The list of tariffs announced by Trump

MARK SCHIEFELBEIN/AP

Muto said he had explained to the US commerce secretary, Howard Lutnick, “how the US tariffs would adversely affect the US economy by undermining the capacity of Japanese companies to invest” before Trump’s announcement of a new 10 per cent baseline tariff and extra levies on selected countries, including Japan.

The government spokesman, Yoshimasa Hayashi, added: “We have serious concerns as to consistency with the WTO agreement and Japan-US trade agreement.”

South Korea’s acting President, Han Duck-soo, called for talks with US officials to shield its export-reliant economy from the impact of US tariffs and ordered emergency support measures for businesses.

Trump said South Korean exports into the US would be subject to a 25 per cent tariff rate.

President Han asked the industry minister to analyse the content of the tariffs and actively negotiate with Washington to minimise the impact.

“As the global trade war has become a reality, the government must pour all its capabilities to overcome the trade crisis,” Han said at a meeting with the finance minister and other top officials.

Ahn Duk-geun, the industry minister, called the new tariffs “regrettable”.

Anthony Albanese, Australia’s prime minister, said on Thursday the decision by Donald Trump to impose a 10 per cent tariff on its ally was “not the act of a friend”.

“It is the American people who will pay the biggest price for these unjustified tariffs,” he added. “This is why our government will not be seeking to impose reciprocal tariffs. We will not join a race to the bottom that leads to higher prices and slower growth.”

However he ruled out reciprocal tariffs against the United States.

In comments outside the White House, Trump singled out Australian beef, which recorded a surge in exports to the United States last year, reaching A$4 billion amid a slump in US beef production.

Albanese said Trump had not banned Australia beef, but had imposed a 10 per cent duty on all Australian goods entering the United States, despite US goods entering Australia tariff free.

“The [Trump] administration’s tariffs have no basis in logic and they go against the basis of our two nations’ partnership. This is not the act of a friend,” Albanese told reporters.

World leaders have mainly reacted with anger and warnings of countermeasures after Donald Trump’s announcement of global reciprocal tariffs.

Ursula von der Leyen, the European Commission president, described Trump‘s universal tariffs as a major blow to the world economy and said the European Union was preparing to respond.

“We are already finalising the first package of countermeasures in response to tariffs on steel,” she said in a statement read out in the Uzbek city of Samarkand on Thursday, before an EU-Central Asia partnership summit.

“And we’re now preparing for further countermeasures to protect our interests and our businesses if negotiations fail.”

Von der Leyen said she deeply regretted the US move and warned of “immense consequences” for the global economy.

The EU plans to impose tariffs on up to €26 billion euros ($28.4 billion) of US goods this month in response to US steel and aluminium tariffs that took effect on March 12.

President Macron accused President Trump of inflicting a brutal shock on the world trade system, Charles Bremner writes.

Speaking at the start of an emergency meeting of business leaders at the Elysee Palace, Macron said Trump’s announcements were “a shock to world trade”.

They were “brutal and without basis because you do not correct trade imbalances with customs duties”, Macron added.

European financial markets fell sharply after Trump sent US tariffs up to their highest level in more than a century, Jack Barnett writes.

In London, the FTSE 100 slid by 1.35 per cent, or 116.32 points, to 8,492.17, while the domestically-focused FTSE 250 index dropped by 0.78 per cent, or 152.99 points, to 19,496.64.

Europe’s foremost stock indices suffered heavier blows during early trading. Germany’s Dax index tumbled by 1.61 per cent and France’s Cac 40 slipped by 1.85 per cent. The pan-European Stoxx 600 index declined by 1.42 per cent.

The Nikkei dropped by 2.77 per cent

KAZUHIRO NOGI/AFP/GETTY IMAGES

There was intense selling during overnight trading in Asia: Japan’s Nikkei index dropped by 2.77 per cent, Korea’s Kospi shed 0.76 per cent and China’s CSI 300 fell by 0.59 per cent. Thailand’s SET 50 index slid by 1.34 per cent, while Australia’s ASX 200 dropped by 0.94 per cent.

European government bonds rallied on Thursday as traders raised their bets on central banks cutting interest rates to offset Trump’s tariffs. The yield on the benchmark ten-year UK government bond dropped by 10 basis points to 4.559 per cent, while the rate on the German equivalent fell by 6 basis points to 2.645 per cent.

The Trump administration has complained about the UK’s higher animal welfare and environmental standards, which prevent US meat producers exporting chlorine-washed chicken and hormone-treated beef to Britain, Adam Vaughan writes.

“The UK maintains non-science-based standards that severely restrict US exports of safe, high-quality beef and poultry products,” the White House said in a statement.

Chlorine washes are used on chicken carcasses to remove bacteria, a practice that is banned in the UK. Nigel Farage, the Reform leader, angered British farmers last week by suggesting the UK should allow imports of US chlorinated chicken. “Label things, let consumers decide,” he said.

More than 90 per cent of US poultry producers no longer use chlorine, but many American meat producers still use antimicrobial washes, according to the UK National Farmers Union. In previous trade deal negotiations, the US has strongly pressed the UK on agricultural exports to Britain.

Tom Bradshaw, president of the union, urged the UK government to block imports of US meat made to lower standards. “It should be a barrier, a red line which cannot be crossed. This is a moment of reckoning here, for what is it the UK stands for.”

The UK has not had any “special treatment”, the shadow home secretary has said.

Chris Philp told LBC: “Dozens and dozens of countries have the same 10 per cent tariffs on all goods and 25 per cent on cars, just the same as us — from Costa Rica to Colombia, from Peru to Paraguay. So we’re not getting any special deal or special treatment.”

He added: “This is really bad for our economy. It’s going to put jobs and growth at risk.”

Philp specifically highlighted the automotive sector, which he said was “hugely at risk” and already “reeling” from Labour’s policy on electric cars and “Ed Miliband’s crazy energy policy”.

Labour have introduced a mandate for electric vehicles to constitute a certain percentage of a brand’s new vehicle sales, rising each year to 2035 when all new vehicles must be zero-emission.

Singapore was disappointed to be slapped with US tariffs of 10 per cent despite the wealthy Asian financial hub having a free-trade agreement and running a bilateral trade deficit with the United States, Singapore’s trade minister said on Thursday.

Singapore could take countermeasures under the free-trade agreement in force since 2004, but has chosen not to do so, Gan Kim Yong, the trade minister, told a press conference.

“Retaliatory import duties will just add cost to our imports,” he said, noting that the government would be reviewing its economic forecasts because of the worsening situation.

Gan said Singapore will try to engage the US to understand President Donald Trump’s areas of concern and see if they can be resolved.

“If there are no specific concerns, then it’s more difficult to argue or to negotiate,” he said. Singapore was hit by Trump’s 10% base tariff on imports.

The American economy will be most hurt by Trump’s tariffs but the whole world will be made poorer, academics have warned.

Professor Jonathan Haskel, chair in economics at Imperial College Business School, said: “We should remember that the US is a relatively closed economy. British imports are around 30 per cent of GDP, American imports are around 15 per cent, so we must not overstate the impact of unilateral American restrictions on trade on the world. Unless we descend into a full trade war, the economy most hurt by these measures is the American economy.”

Professor Tommaso Valletti, professor of economics at Imperial College Business School, added: “This approach is like spinning a roulette wheel in total darkness. No product is produced uniquely within a single country, as the value chain is distributed across the world.

“Trump’s tariffs will fail to close the trade and budget deficits, raise prices, and make America, the UK, and the world poorer by squandering the gains from trade.”