Global trade latest: Trump pauses higher 'reciprocal' tariffs but ramps up trade war with China

Trump has announced a major change to his tariff regime as the world's two largest economies erect ever higher barriers to trade.

Summary

  • Donald Trump’s "Liberation Day" tariff announcements sparked a stock market selloff, given their implications for global trade;
  • A baseline tariff of 10% on all US imports came into effect over the weekend. Higher "reciprocal" tariffs for specific products and countries started on 9 April, before the US president announced a 90-day pause on tariffs for dozens of countries ;
  • Stock markets are volatile over fears of shrinking global trade;
  • China and US continue to ratchet up tariffs on imports: Trump has increased the tariff to 145% on Chinese goods, after Beijing today upped its tariff on US imports to 125%;
  • During the 90-day pause period, a "universal 10%" tariff will be in place for all countries except China;
  • Democrat politicians have accused the Trump administration of insider trading.

| Stock market turmoil | Protect your portfolio | Auto stocks plunge |

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Good morning, and welcome to our global trade live blog

FTSE 100 falls 11% on tariff fallout

The fall is higher than expected – economists and analysts polled by Bloomberg thought that inflation would fall to 2.5%.

As the data was collected before ‘Liberation Day’, the March data does not reflect the potentially inflationary repercussions of Trump’s tariffs in full.

Early indicators show this is welcome news for the market with stock futures going up, though they are still being traded below yesterday’s close.

Keir Starmer: the end of the world as we know it?

In an op-ed for the Sunday Telegraph over the weekend, prime minister Keir Starmer stated that “the world as we knew it has gone”.

“First it was defence and national security,” he wrote. “Now it is the global economy and trade.”

UK Prime Minister Keir Starmer chairs a roundtable with UK business leaders at Downing Street on April 3, 2025 in London

UK prime minister Keir Starmer last week, addressing a roundtable with UK business leaders at Downing Street. Starmer is expected to make a speech today on the possible responses to Donald Trump’s tariff trade war that has rocked global stock markets.

(Image credit: Ben Stansall - WPA Pool/Getty Images)

The new world, he continued, will be one driven by “deals and alliances” rather than “established rules”. This era, he wrote, “demands the best of British virtues – cool heads, pragmatism and a clear understanding of our national interest”.

The prime minister is expected to give a speech in the West Midlands today reiterating these themes, and highlighting the steps that the government is considering in order to protect the British economy.

These could include using industrial policy to protect British businesses.

“This week, the Government will do everything necessary to protect Britain’s national interest,” he wrote. “We have gone further and faster on national security, now we must do the same on economic security through strengthened alliances and reducing barriers to trade.”

It is expected that Starmer will announce a relaxation to the 2030 ban on new petrol vehicle sales, in a bid to support the UK automotive industry.

Send us your questions

We’ll be reporting live on global trade news throughout the week, and we’re particularly keen to bring expert opinion on the things that matter most to you.

If there are particular questions you want answered on the tariff story and how it might affect your money, send them to editor@moneyweek.com with the subject line ‘Tariff question', and we will do our best to answer them as the week goes on.

Could Chinese retaliation spark a global trade war?

Beijing was quick to respond to Trump’s tariff announcement, which included 34% tariffs on all imports from China.

On Friday, China announced that it will increase tariffs on all US imports by that same 34% figure – on top of the 10-15% tariffs on US imports that it imposed on agricultural and energy products earlier this year.

However, the world’s two largest economies now appear to have nowhere to go. China’s retaliation leaves little in the way of an off-ramp, and increases the antagonism between the two countries.

“That retaliation from China sparked a fresh wave of selling pressure at the end of last week, with futures on the S&P 500 moving sharply lower at that point, before the index fell to its worst-daily performance (-5.97%) since March 2020, at the height of the initial pandemic wave,” wrote Henry Allen, macro strategist at Deutsche Bank.

What is a tariff?

If you’re reading this blog, you’re almost certainly aware that tariffs are having a major impact on the global economy and your investments in the stock market.

However, you might not be completely clear on what a tariff is. Thankfully, MoneyWeek’s Katie Williams has this excellent explainer: What are tariffs and what do they mean for your money?

S&P 500 opens 2.4% down

"We've got your back": Keir Starmer and Rachel Reeves address auto industry

“We want to provide clarity and certainty for manufacturers like JLR,” said Reeves.

Car exports to the US will be hit by 25% tariffs thanks to Trump’s ‘Liberation Day’ directives.

A Range Rover Sport sports utility vehicle (SUV) moves along the production line at Tata Motors Ltd.'s Jaguar Land Rover vehicle manufacturing plant in Solihull, UK, on Friday, Jan. 20, 2023

The government is aiming to support auto manufacturers like Jaguar Land Rover, in the face of steep new tariffs that have been introduced by Donald Trump on exports to the US.

(Image credit: Chris Ratcliffe/Bloomberg via Getty Images)

“These are challenging times, but we have chosen to come here because we are going to back you to the hilt,” Starmer told JLR workers gathered at the plant.

“There’s no doubt a challenge. But this is a moment for cool heads. Nobody wins from a trade war,” he said. “We’ve got to rise together as a nation. The great challenge of our age is that we’ve got to renew Britain.”

How does the stock market crash impact your pension?

As the stock market has tumbled in the wake of Trump’s swingeing trade tariffs, the general advice from the experts is to keep calm and to focus on investing as a long-term pursuit. Stock market drawdowns happen, but long term investors ought to be able to ride these out.

However, what about the impact of the falls on pensions – particularly for pensioners, or those approaching retirement?

“Pension savers may have already seen an alarming fall in the value of their retirement fund,” says Ed Monk, associate director, Fidelity International.

“There are lots of reasons, however, why they may not need to worry - and why panicking now is likely to be the worst response,” he adds.

Anyone who is 10 years or more from retirement “can probably afford to relax more in response to these developments”. Losses that pension funds suffer now will have plenty of time to recover their value.

In fact, the depressed prices at which global stocks are currently trading is an opportunity for anyone still contributing to their pension. They are snapping up more assets at lower costs, which “can boost your returns in the long run”.

Those closer to retirement might justly be worried that their pensions won’t have time to recover. Normally, though, pensions that are closer to being needed will have a higher allocation towards safer assets – especially bonds and cash.

“After a long period in which bonds have disappointed, they have performed the role of unlikely saviour in the recent market sell-off,” says Monk. “Fears of an economic slowdown has seen a flight to the safety of bonds pushing up prices.

“Many workplace pension schemes will automatically increase your allocation to bonds in the run up to retirement to protect against precisely the sudden losses for shares that we have seen this year.”

“Withdrawing a fixed amount in this current environment will erode savings quicker if your investments are down,” says Monk. “If you can live off the natural yield this may be more suitable because it won’t deplete the investment itself and when the market does turn around the capital will still be there.”

Social media rumour sends stock market swinging

Rumours of the pause sparked optimism, but White House press secretary Karoline Leavitt has branded it “fake news”. Markets have since resumed their slump; the S&P 500 is down 2.1% today.

Trump threatens additional tariffs on China

The tit-for-tat trade war between the world’s two largest economies is ramping up.

Following China raising tariffs on US imports by 34% in response to ‘Liberation Day’, Trump has today threatened to impose additional 50% tariffs on Chinese imports if Beijing does not withdraw its tariffs.

EU trade negotiations with US

EU trade commissioner Maroš Šefčovič has told reporters today that the bloc is negotiating with US counterparts over a trade deal, but that the tariffs the US has imposed "forces us to look at additional steps".

European Commission president Ursula von der Leyen had stated earlier today that the bloc has offered a "zero-for-zero" deal with the US on industrial goods. Šefčovič, however, played down the chances of this happening in the near term.

Trump tariffs criticised by allies

Bill Ackman, CEO of the hedge fund group Pershing Square Capital Management – a former Democrat supporter who switched his allegiance to Trump ahead of the most recent election campaign – has warned the tariffs will cause an “economic nuclear winter” and called for “a 90-day time out” for further negotiations.

This comes on top of more politically distant figures like Richard Branson, who posted on LinkedIn yesterday warning that the tariffs’ sudden imposition is having “catastrophic results for ordinary Americans and for the rest of the world”.

FTSE 100 makes positive start

“However, this should hardly be seen as the end of the trouble, especially with President Trump showing no signs of easing his stance on perceived trade imbalances,” says Matt Britzman, senior equity analyst at Hargreaves Lansdown.

“Futures indicate a positive open this morning, but volatility remains the only certainty at this point,” Britzman goes on to say.

Could tariffs lead to faster interest rate cuts?

“As far as crystal ball gazing goes, we would expect the BoE to now be more aggressive in its rate cutting path given the increased headwinds to economic growth,” says Phil Jenkins, CEO of corporate finance firm Centrus.

Lower interest rates are typically beneficial for equities, particularly in growth sectors like technology, because they increase the appeal of stocks relative to less risky alternatives like cash or bonds. It also encourages higher levels of borrowing (and therefore spending) by consumers – leading to higher corporate profits – as well as businesses, meaning they can invest in growth more cheaply.

Is Trump rolling back a century of globalisation?

During the post-war era, US effective tariff rates have been consistently below 10%. That period has seen the rapid rise of globalisation – a trend that Trump is explicitly seeking to reverse.

Alex Tedder, chief equities investment officer at Schroders, says “the White House has indicated that the reciprocal tariffs could be negotiated down, most tariffs are likely to be kept in place which represents a major disruption and readjustment to the existing trade regime”.

Schroders’ economic analysis puts the US effective tariff rate as a result of the ‘Liberation Day’ tariffs at 25.3%. Full implementation of reciprocal tariffs would add another 10.3% points onto this.

US effective tariff rates rose to 20% during the Great Depression, but haven’t been higher than this for 120 years.

Charts showing the historical effective US tariff rate, 1821-2025, and the breakdown of how Trump's recently announced tariffs will impact the effective US tariff rate.

(Image credit: Schroders Economics Group. 4 April 2025)

“The current US administration is seemingly willing to tolerate significant short-term economic pain in its ambition to reshape perceived global trade imbalances,” says Tedder.

“Given that the US relies on foreign nations to fund its twin budget deficits, this unconventional economic policy is likely to test investor confidence in US stability,” he adds.

JLR, Nintendo pause US shipments in response to tariffs

Jaguar Land Rover (JLR), whose Solihull factory hosted prime minister Keir Starmer and chancellor Rachel Reeves yesterday, has paused shipments to the US during April in response to the new tariffs – both on UK imports (10%) and car imports (25%).

Reeves to speak to US treasury secretary “shortly”

Chancellor Rachel Reeves has addressed the House of Commons on the tariff fallout, telling MPs that she has spoken to Bank of England governor Andrew Bailey this morning, who assured her “that markets are functioning effectively and that our banking system is resilient”.

She mentioned trade talks she had held recently with “Canada, Australia, Ireland, France, Spain, and with the European Commission”, and mentioned that tomorrow she will hold negotiations with India over securing a new trade deal with the country.

When pressed on discussions with the US by shadow chancellor Mel Stride, Reeves said “I will be meeting US treasury secretary Scott Bessent shortly”.

Reeves also issued assurances to businesses, referencing the support she and prime minister Keir Starmer offered to the auto industry yesterday, telling them and consumers concerned about the cost of living that “we have your backs”.

Prime Minister Keir Starmer gestures as he speaks to workers, with the Chancellor of the Exchequer Rachel Reeves, during a visit to a Jaguar Land Rover car factory on April 7, 2025 in Birmingham, United Kingdom

Keir Starmer and Rachel Reeves at JLR in Solihull yesterday, as they announced measures designed to support the automotive industry in the face of Trump’s tariffs.

(Image credit: Kirsty Wigglesworth - WPA Pool / Getty Images)

More on tariffs and pensions

Today, we’ve heard from Mark Futcher, partner at professional services consultancy Barnett Waddingham, with his views on how the tariff volatility impacts those who were close to taking their pension.

For anyone planning to take it soon, “the impact will depend on how you plan to take your money”, he says.

“If you’re planning to take it gradually through drawdown, remember that your investments will still be working for you long-term through your retirement. And if you're aiming to buy an annuity and are in an annuity-focused fund, you’re likely already protected from much of the recent market dip because you won’t be heavily exposed to equities.”

“The most important thing is not to make any sudden decisions. Make sure you understand what your pension is aiming for and speak to a professional adviser if you're unsure.

“It’s not easy when the headlines are crying crisis - but when it comes to your pension, you really must keep calm and carry on.”

US markets open strongly

One of the most in-demand people in the world right now is Scott Bessent. Earlier today he told CNBC that “up to 70 countries” had contacted the White House seeking negotiations on trade tariffs.

“Two clusters of countries are emerging in terms of their response to tariffs,” says Paul Diggle, chief economist at Aberdeen. Those queuing up to negotiate with the White House, which include the UK, Japan, and possibly the EU, are one group.

“The other [is] planning to retaliate,” says Diggle. “China appears committed to retaliation. Trump in turn threatened to impose an additional 50% tariff on China, which, if enacted, would push the average tariff facing Chinese exporters well above 100%.”

US Treasury Secretary Scott Bessent arrives to the U.S. Capitol on April 02, 2025 in Washington, DC. Bessent met with Senate Republicans ahead of President Trump's announcement on a new round of tariffs

US treasury secretary Scott Bessent – shown here arriving at the US Capitol last week ahead of the tariff announcement – has raised investors’ hopes that negotiated exemptions to the tariff regime could be incoming.

(Image credit: Kevin Dietsch/Getty Images)

“President Trump has maximum negotiating leverage right here right now,” Bessent told CNBC. “It would be a mistake for anyone to think otherwise.” He added that countries that hadn’t retaliated would be given priority positions in the “queue” for trade talks.

A much more positive day for stock markets today. The FTSE 100 is up over 3.5% as we approach the close of markets in the UK.

Could tariffs exacerbate stagflation?

“Tariffs and trade wars (or wars of any sort) are not good for the global interconnected economies and world we live in,” Raymond Backreedy, chief investment officer at Sparrows Capital, tells MoneyWeek.

“Past evidence and data (1920s) has shown that isolationist policies tend to dampen global growth and push up inflation, neither of which is good for the economy,” he adds.

Elon Musk hits out at Trump’s trade adviser Peter Navarro

Elon Musk has called Trump’s tariff tsar Peter Navarro “dumber than a sack of bricks” in a post on his social media site X (formerly Twitter).

The war of words came after Navarro described Musk as a "car assembler" rather than a "car manufacturer” because he claimed many components used in Tesla vehicles are imported.

“We just have to understand. Elon sells cars, and he’s in Texas assembling cars that have big parts of that car from Mexico, China, the batteries come from Japan or China, the electronics come from Taiwan,” he said.

Musk hit back against Navarro, calling him “a moron” and arguing the claims he made were “demonstrably false.”

He claimed Tesla has the most American-made cars of any manufacturer and said: “By any definition whatsoever, Tesla is the most vertically integrated auto manufacturer in America with the highest percentage of US content.”

The spat is the latest example of dissent by Musk over Trump’s universal tariff regime.

On Saturday (5 April), Musk, who is the richest person in the world, called for a “zero tariff situation” between Europe and the US, rather than the 20% tariffs imposed on ‘Liberation Day’.

FTSE 100 rebounds on dealmaking hopes

‘’With hints of negotiations in the air, relief has flooded through financial markets, with the FTSE 100 rebounding from a chunk of yesterday’s losses,” Susannah Streeter, head of money and markets at Hargreaves Lansdown, said.

“Investors have taken the chance to buy into beaten up stocks, with an eye on a longer-term recovery.

“They’ve also been buoyed by measured stances from leaders across the European Union, the UK, Japan and South Korea, who have shown a willingness to talk first and hold off from retaliatory action for now.”

However, sentiment remained “skittish” towards the end of the day, she warned.

Trading activity spiked among retail investors after tariff announcement, says AJ Bell

Trading activity among retail investors in the UK has sharply increased in the wake of Trump’s new tariff regime.

Data from AJ Bell shows that on the Friday and Monday (4 and 7 April) after ‘Liberation Day’, activity on their investment platform doubled as investors moved to protect and reposition their portfolios.

Charlie Musson at AJ Bell said: “Current market volatility has caught the attention of DIY investors, with significantly higher than usual trading activity in recent days as customers use the flexibility of our platform to protect and reposition their portfolios."

Commenting on the volume of buy trades in the wake of the sell-off, Musson said it is a sign investors “are seeing this as a buying opportunity” and repositioning their portfolios towards ‘safer’ investments “in the expectation of a recovery in the months and years ahead".

– Daniel Hilton, Junior Writer

Will Trump’s tariffs send inflation to a new high?

We have already seen how Trump’s trade war has had consequences on global stock markets, but what is not yet clear is how the president’s actions will affect key economic indicators like inflation.

Analysis from consultancy Capital Economics suggests Trump’s tariffs will push the effective tariff rate up by around 25 percentage points. As imports account for roughly 10% of consumption in the US, this could add roughly 2.5 percentage points to the CPI price level, the consultancy said.

Capital Economics expects US CPI to be “well north of 4%” by the end of this year, up from 2.8% in February. This would be a significant rise, but still lower than the post-pandemic peak of 9.1% in June 2022.

The inflationary impact of tariffs will not just affect the US – they could also send inflation higher in the UK.

Read our analysis on whether Trump’s tariffs will send inflation to a new high.

How have European markets performed?

Britain’s stock markets are in the green with the FTSE 100 closing 2.71% higher today, while the FTSE 250 had an even stronger day, closing up 3.29%.

In Europe, Germany’s DAX index is up 2.48%, France’s CAC 40 is up 2.50%, and the EURO STOXX 50 (which measures the performance of 50 Eurozone stocks) ended 2.52% up.

“It feels like a lifetime since stock markets were moving higher, but finally we’ve had the magic bounce-back day,” says Dan Coatsworth, investment analyst at AJ Bell.

“The majority of the stocks in the FTSE 100 were in positive territory as investors regained confidence and celebrated the end of the market bloodbath.

White House press conference to begin shortly

"Trump is willing to talk"

S&P 500 loses gains

BREAKING: Additional tariffs of 104% on China will begin tomorrow

The briefing has now come to an end.

If you have a question you'd like to ask on the ongoing tariff story, email MoneyWeek at editor@moneyweek.com with the subject line ‘Tariff question'.

Morning recap – stocks down as tariffs come into effect

Trump’s sweeping additional tariffs came into effect overnight – including 104% tariffs on imports from China, after the country retaliated to the tariffs Trump unveiled last week.

The US stock market – which had made an optimistic start yesterday on hopes that most tariffs could be negotiated away in time – fell as it became clear that trade relations between the world’s two largest economies was only set to deteriorate. The S&P 500 closed 1.6% lower.

FTSE 100 opens 2.3% lower

The FTSE 100 has opened 2.3% below yesterday’s close, following the onset of Donald Trump’s tariffs. That erases almost all of the gains the index made yesterday.

Reeves meeting Indian officials for trade talks

“In a changing world, this government is accelerating trade deals with the rest of the world to back British business and provide the security working people deserve.

“We are going further, faster to create the best possible conditions for British business by working to reduce barriers to trade.

“That’s why the business secretary and I are today meeting with India’s Finance Minister, Nirmala Sitharaman, as part of our two nations’ Economic and Financial Dialogue as we seek to secure a new trade deal.”

Reeves added that the meeting will focus on “growth and global issues, as well as how we can unleash potential across various sectors and defence to create jobs, investment and trade opportunities”.

Why are tariffs bad for the UK economy?

The UK has been placed on, relatively speaking, the lowest band of tariffs possible. However, the FTSE 100’s selloff has been every bit as marked as those of other countries’ stock markets. Why is this the case?

Put simply, the UK’s economy is one of the most interconnected in the world, so any disruptions to global trade weigh heavily on the country’s largest companies.

As the Bank of England notes in its Financial Policy Committee (FPC) meeting notes, published today, “as the UK is an open economy with a large financial sector, global risks are particularly relevant to UK financial stability”.

As of the end of 2024, Financials was the largest sector in the FTSE 100, accounting for 23.1% of its total weighting. Some of its other largest component sectors – like Industrials (14.5% of FTSE 100 weighting), Energy (10.8%) and Materials (7.4%) – are highly cyclical and exposed to the global economy.

This means that the UK economy is highly exposed to any global downturn – precisely what the trade war brewing between the US and China threatens to provoke.

The FPC continued: “Since the FPC’s previous meeting on 15 November, global trade policy uncertainty had intensified and some risks had crystalised.

“The United States had made a wide range of tariff announcements on 2 April and some governments had responded with their own tariff announcements. This had contributed to a material increase in the risks to global growth and a weakening of the central outlook, as well as increased uncertainty over the outlook for inflation globally.”

BREAKING: China raises tariffs to 84%

China’s finance ministry has announced an additional 84% tariff on all US imports, to take effect from midnight in China on 10 April.

Trump’s Truss moment?

Yields on US government bonds – “Treasuries” – are climbing fast today.

In the immediate aftermath of the Liberation Day announcement, Treasury yields fell. That’s a fairly predictable move; as stock markets fall, government bonds, which are generally viewed as a much safer investment, typically fall. (Bond yields are inversely related to prices, so as demand for bonds increases, pushing the price up, yields fall).

Charts showing US 10 year-Treasury yields January - April 2025

(Image credit: Macrotrends)

“There is some speculation that ‘technical trading’ from large investors like hedge funds is having an impact. This could be in the form of having to sell assets to cover losses and Treasuries are typically the most liquid asset large investors hold, outside of physical cash," says Hal Cook, senior investment analyst at Hargreaves Lansdown.

Uncertainty over future US government tax and spending plans could also be playing a part.

China is one of the world's largest buyers of US government debt, holding around $760 billion worth. It’s possible that there is a mass selloff of its US government debt happening in the country as the trade war intensifies.

“US Treasuries are selling off at a pace we’ve rarely seen, levels that have historically triggered some form of intervention by the Federal Reserve (Fed),” says Lale Akoner, global market analyst at eToro.

Fed chair Jerome Powell said on Friday that it isn’t yet time for a “Fed put”, but in Akoner’s view, it might soon be time for the central bank to step in and guarantee market security.

All in all, it calls to mind the gilt yield crisis that followed Liz Truss’ mini-budget in 2022.

UK gilt yields following Treasuries upwards

Yields on 10-year gilts reached 4.86% earlier this afternoon – as high as they’ve been since the gilt crisis back in January – though they have since fallen back to around 4.80%.

“This feels… like a move which is about relative value,” says Hal Cook, senior investment analyst, Hargreaves Lansdown. “If the Treasury yield falls, gilts become more attractive on a relative basis, so investors might sell Treasuries and buy gilts. The opposite is also true.”

They also increase the cost of government borrowing – which will be of great concern to chancellor Rachel Reeves, who had a hard time balancing the government books at her Spring Statement, when gilt yields were much lower than the levels they’re reaching today.

Breaking: EU votes to impose tariffs on US imports

What do the Trump tariffs mean for UK interest rates?

Economists are starting to wonder whether Trump’s escalating trade war could prompt the Bank of England’s Monetary Policy Committee (MPC) to accelerate its interest rate cutting cycle.

“If global headwinds intensify, financial conditions tighten, and the real economy shows clearer signs of slowing, then the MPC will likely opt to move faster rather than slower,” said Sanjay Raja, chief UK economist at the investment bank.

However, cutting interest rates faster runs the risk of exacerbating inflation, which is already above the Bank’s 2% target rate and could be fanned further by the breakdown in global trade.

Deutsche Bank still assumes that the Bank will cut rates by 25 basis points at a time, four times this year. However, the odds of a faster cutting cycle are increasing, “albeit from a low base”.

Read more here: Will the Bank of England cut interest rates by 50 bps in response to Trump’s tariffs?

Governor of the Bank of England Andrew Bailey

Governor of the Bank of England Andrew Bailey.

(Image credit: Photographer: Darren Staples/Bloomberg via Getty Images)

Wall Street analyst: Trump tariffs are “worst US policy mistake since 1930”

US stocks are, somewhat inexplicably, rallying today, with the S&P 500 up 0.5% and the Nasdaq Composite – predominantly comprised of big tech stocks – is up around 1.8%.

Daniel Ives, global head of technology research at Wedbush Securities, has called the ‘Liberation Day’ tariffs “Trump tariff armageddon” in a research note seen by MoneyWeek.

Ives said that the instigation of higher tariffs last night “will go down as the worst US policy mistake since Smoot-Hawley in 1930 in our view”.

“These tariffs have already created significant enterprise demand destruction out of the gates as Cap-Ex and new projects are being halted across the US until this chaotic situation is better understood by CEOs and business leaders around the world,” Ives writes.

The technology sector, he adds, is particularly heavily impacted because “the hearts and lungs of the supply chain are cemented in Asia.” He highlights the fact that tariffs could double the cost of computer chips imported from China, and no domestic alternative is available.

“A US tech company CEO cannot decide last night ‘let’s call Smith Semi Fab Operations in the Midwest to get those semi chips’ as there is one slight problem.... IT DOES NOT EXIST,” says Ives, adding that building semiconductor fabs in the US will take years.

Reeves announces £400 million trade and investment deals with India

Following meetings today with Indian Finance Minister Nirmala Sitharaman, chancellor Rachel Reeves has announced a package of trade and investments worth £400 million with the country.

The package consists of £128 million of newly announced export deals and investments, as well as recent deals worth £271 million. These include planned investments in the UK from Paytm, India’s largest digital payment app, as well as major investments into their Indian operations and presence from Barclays and HSBC.

“We have listened to British businesses, which is why we’re negotiating trade deals with countries across the world, including India, so we can support them and put more money in people’s pockets as part of our Plan for Change,” said Reeves.

“Our relationship with India is longstanding and broad and I am delighted with the progress made throughout this dialogue to develop it further.”

“Both the UK and India are committed to delivering economic growth and giving businesses the confidence and stability they need to expand,” said Jonathan Reynolds, secretary of state for Business and Trade.

“That is why we are continuing to negotiate towards an ambitious trade deal that unlocks opportunities both at home and abroad for British businesses.”

Send us your pension questions

We’re aware that many of you will be concerned about how today’s government bond selloff, following the stock market fall, will be impacting your pension.

Oil prices at lowest level since Covid

Falling oil prices could alleviate some of the inflationary pressures of tariffs – though they imply significantly reduced economic output.

“Sharp oil price declines will show up in lower prices at the pumps. UK wholesale gas prices have also come down markedly, to levels not seen for six months,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Oil field with rigs and pumps at sunset

(Image credit: Anton Petrus via Getty Images)

Preparing your finances for Tariffs

Kalpana headshot
Kalpana Fitzpatrick

While Trump was heard saying “These countries are calling us up, kissing my a**. They are dying to make a deal,” at Congressional Dinner in Washington, it does not look like countries are backing down, with China imposing an 84% levy on US imports. European Union members also voted in favour of imposing tariffs from 15 April.

But as markets continue to wobble, I am sensing real fear from consumers and how this may impact their money. When my phone goes ‘ping’ with people asking me ‘What shall I do about my money? Is my bank going to go bust? and so on - I know people are worried we may be hitting hard times again

And yes, we possibly may be hitting a high inflation period, lower rates and a possible recession - but putting measures in place could mean there is no real need to panic.

There are a few things to think about:

• Pensions: If you’re saving into a defined benefit pension, you’re not going to be impacted as your pension is ‘guaranteed’ and based on your final salary and years of service.

If you have a defined contribution pension - then you do not need to worry if you are years away from retiring, as the market will pick up again. Ignore the noise.

And if you are close to retirement, you may be somewhat concerned. If you can hold off accessing your pension money, you should. But in any case - if you are looking to access your pot soon, it is important you seek professional advice to discuss all your options.

• Savers: there is a chance the Bank of England may go in for a larger than anticipated base rate cut. If you’re lucky enough to have cash savings, bag those rates now as they will disappear. See our round-up of the best savings and cash ISA accounts.

But, there’s a silver lining for mortgages as lenders start to drop rates and if your fixed deal is coming to an end, start shopping for a new deal now.

• Inflation: Inflation may rise and there is an expectation the cost of goods will go up.

You may for example, find clothing and shoes get pricier, especially if they are made in Asia. Nike, for example, may find its supply chain is impacted, and your favourite trainers may well go up in price.

-Unemployment: Another threat is to jobs, especially in industries that export to the US. There is also a looming threat of a recession.

Do you have a question about tariffs and how it could impact your money? Get in touch at  editor@moneyweek.com as we answer reader questions.

Property quietly outperforms during market chaos

Ruth Emery author headshot
Ruth Emery

Property equities and UK real estate investment trusts (Reits) have held up well during the market mayhem.

Matt Norris, head of real estate securities at Gravis, comments: “There’s an old saying, ‘in uncertain times, buy land, gold, and ammo’. Well, March and the start of April have delivered a modern twist on that survivalist mantra.”

The VT Gravis UK Listed Property Fund, which invests in property like care homes, student accommodation and warehouses, is up 1.31% since the start of March, while the MSCI UK IMI Core Real Estate sector is down 5.36%.

This compares to big falls in the FTSE 100 (down 9.67%) and S&P 500 (down a massive 17.40%).

Norris notes that gold has also performed well, but that UK property has been a “standout, reminding us of its diversification benefits”.

He adds: “In five weeks that shook the markets, owning the right kind of land — and the right kind of gold — still paid off. Ammo? Let’s hope we never need that.”

BREAKING: Trump pauses some tariffs but hikes China rate

US stock markets rally on 90-day higher tariff relief

Trump's 90-day pause – statement in full

"Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately.

US stocks have surged after Trump's 90-day pause announcement. However, it's currently unclear whether the rebound be enough after the falls seen in recent days.

Recap: reciprocal tariffs on hold

The FTSE 100 is trading 4.2% higher this morning following Trump’s reversal on his reciprocal tariff regime yesterday. We’ll dig into the details and implications of his 90-day pause throughout the day, but the headlines are that – with the exception of China, where Trump has ratcheted tariffs up to 125% – all countries are, for the moment, on the 10% baseline rate.

World breathes a sigh of relief, but is the US permanently damaged?

The tariff pause gives the world a moment to breathe, collect itself, negotiate with the US, and prepare for the eventual resumption of tariffs – should those negotiations fail – in fuller knowledge of what they will entail.

“Even if the tariffs are permanently suspended, damage has been done to the economy via a permanent sense of unpredictability in policy,” says George Saravelos, global head of FX research at Deutsche Bank.

“More structurally, the events of the last few weeks will resonate amongst global economic partners during the upcoming negotiations on trade and indeed for many years to come. The desire to build greater strategic independence from the US across all fronts will be here to stay.”

In that context, it is notable that chancellor of the exchequer Rachel Reeves yesterday said that the tariff regime makes it “imperative” that the UK improves its trading relationship with the EU, on the same day she announced £400 million in trade and investment commitments following meetings with her Indian counterpart Nirmala Sitharaman.

Britain's Chancellor of the Exchequer Rachel Reeves shakes hands with her Indian counterpart, Finance Minister Nirmala Sitharaman at the London Stock Exchange Group (LSEG) during an India-UK Economic and Financial Dialogue (EFD) on April 9, 2025 in London, England

Chancellor Rachel Reeves with India's finance minister Nirmala Sitharaman yesterday. Do these trade negotiations mark the start of a move away from global dependence on US trade?

(Image credit: Justin Tallis-WPA Pool/Getty Images)

BREAKING: EU pauses tariff countermeasures

The European Union has said it will pause its tariff countermeasures for 90 days, after Trump announced a 90-day pause to higher “reciprocal” tariffs on some countries yesterday.

European Commission president Ursula von der Leyen today said the EU “wants to give negotiations” a chance.

“If negotiations are not satisfactory, our countermeasures will kick in,” she said in a statement posted on X.

“Preparatory work on further countermeasures continues. As I have said before, all options remain on the table.”

Republicans accused of market manipulation

Democrat politicians have raised accusations of market manipulation against the Trump administration following yesterday’s sudden announcement of a tariff pause, which sent markets surging.

“There is all too much opportunity for people in the White House to be insider trading,” senator Adam Schiff told reporters yesterday. Schiff has called for an investigation of insider trading to be launched.

Hours before announcing the pause, which led to a huge rebound in the US stock market, Donald Trump posted on his Truth Social account “THIS IS A GREAT TIME TO BUY!!!”.

The previous evening, Trump’s press secretary Karoline Leavitt had told a press conference that the president was “not considering an extension or a delay” in the imposition of the reciprocal tariffs.

Yesterday, Leavitt told the US press that the media had “missed the art of the deal” – implying that the point of the tariffs all along was to bring other countries to the negotiating table and to isolate China.

Trump’s trade representative Jamieson Greer was testifying to a House committee yesterday when the U-turn was announced, and faced a barrage of questions from Democrat representative Steven Horsford.

“If it was always the plan [to pause the tariffs], how is this not market manipulation?” Horsford demanded. “If you came here knowing that … these tariffs were going to be turned off… why didn’t you reference that as part of your testimony?”

U.S. Sen. Adam Schiff speaks alongside Sen. Dick Durban during a bicameral hearing on the Justice Department in the Dirksen Senate Building on April 07, 2025 in Washington, DC

US senator Adam Schiff has called for an investigation into alleged market manipulation over yesterday's tariff announcements.

(Image credit: Kayla Bartkowski/Getty Images)

US Futures down ahead of market opening

The US stock market staged an incredible rally last night after President Donald Trump announced a 90-day pause on the implementation of “reciprocal tariffs”.

Reduction in 25% tariff on UK cars and steel could be more likely than escape from blanket 10%

Despite Donald Trump rowing back on his “reciprocal tariffs” promise last night, the UK is not out of the woods quite yet.

British steel, aluminium, and cars are still subject to a 25% tariff despite Trump’s desescalation last night, though prime minister Keir Starmer is keen to negotiate this down.

Starmer’s team thinks it is unlikely that the UK will achieve a reduction in the blanket 10% tariff, but headway could be made to decrease tariffs on steel, aluminium, and cars, according to the Financial Times.

The paper reported that a British official said negotiating a reduction in the 10% tariff was unlikely, but “when it comes to the 25 per cent on autos, there is more optimism.”

The UK’s biggest export to the US is cars, with 18.4% of manufactured cars ending up in the US, bringing in £6.4 billion of value, according to the ONS.

Meanwhile, steel is a smaller export to the US with 180,000 tonnes of it being shipped across the pond in 2024 worth £370 million, according to trade body UK Steel.

Some in Labour’s camp say the good relationship fostered with Trump by Starmer will help a more favourable deal manifest. They point to the fact that Britain escaped with only 10% tariffs as evidence of this.

However, the unpredictable nature of the president means it is anyone’s guess whether or not a deal will be reached.

US inflation fell to 2.4% in March

The fall is higher than expected – economists and analysts polled by Bloomberg thought that inflation would fall to 2.5%.

As the data was collected before ‘Liberation Day’, the March data does not reflect the potentially inflationary repercussions of Trump’s tariffs.

Early indicators show this is welcome news for the market with stock futures going up, though they are still being traded below yesterday’s close.

BREAKING: S&P falls 1.9% as US markets open; Dow down 1.5%; NASDAQ down 2.85%

US will charge 145% tariffs on China

What does it all mean for your personal finances?

While stock markets rallied yesterday after Trump announced the 90-day pause of the higher “Liberation Day” tariffs on most countries, the landscape remains volatile.

Uncertainty seems to be the only thing that’s certain right now, with Beijing retaliating with 84% levies on the US today, after Trump escalated tariffs on China from 104% to 125% last night.

“Markets have responded with dramatic swings, reflecting both relief at signs of pragmatism and concern over the potential for a deeper trade rift between the world’s two largest economies,” Ian Futcher, financial planner at Quilter says.

“For households, the implications are wide-ranging with the prices on goods likely to rise, while broader market volatility can affect pensions, ISAs, and investment portfolios.”

Despite markets staging a partial recovery, it would be “premature to assume the volatility is behind us,” Futcher says.

“Pension pots, which are often heavily invested in equities and bonds, remain exposed to global market movements, and further swings in sentiment are highly possible.

“Those nearing retirement may see their pension values fluctuate more than expected and should consider whether their portfolios reflect an appropriate level of risk given the uncertainty.

“Annuity rates – tied closely to long-term gilt yields – may also face downward pressure if rate cuts are used to cushion the economic impact of tariffs.

“For those considering converting pension savings into a guaranteed income, timing will be key.”

Some lenders have cut mortgage rates since Trump’s “Liberation Day” tariff announcement and the subsequent stock market turmoil, in a silver lining for borrowers.

Swap rates – which lenders use to price their fixed-rate range – decreased in recent days, leading to some lower mortgage rates.

The pausing of some tariffs “does change the picture slightly”, Futcher says, but warned there is “still a huge amount of ambiguity in how things will play out”.

Homeowners on fixed-rate mortgages should “plan ahead”, he says, adding: “Ideally, borrowers should have their paperwork in order at least six months before their current deal ends. That allows them to move quickly and secure a competitive rate as they approach the end of their term.

“With mortgage pricing often fluctuating in response to economic news, being ready to act early can make a significant difference to monthly repayments. A conversation with a mortgage adviser can help ensure no opportunity is missed.”

Amid speculation the Bank of England could take a more aggressive approach with interest rate cuts following Trump’s tariffs, savings rates could well fall.

"Lower interest rates, while beneficial to borrowers, tend to erode savings rates, particularly in easy-access accounts,” Futcher explains.

There’s also concern the tariffs could drive inflation higher, which could weaken the real returns savers get, although the impact on inflation is not currently clear.

Futcher urged savers to be “proactive” – “locking into fixed-term deals where higher rates still exist or considering a diversified investment strategy tailored to their time horizon and risk appetite”.

Jessica Sheldon, Deputy Digital Editor

How have European markets fared today?

However, as the day continued and trading opened up across the pond, stocks started to slump from the morning’s high.

Some of London’s biggest winners were 3i, a private equity and VC firm, whose stock price grew by 7.75%, and Barclays which rose by 7.70%.

In Europe, Germany’s DAX closed up 4.53%, and the EURO STOXX 50 (which measures the performance of 50 Eurozone stocks) was up 4.26%.

Markets remain open in America, but here’s a quick snapshot of how they’ve fared in the first two and a half hours of trading.

Deutsche Bank: Reeves’ fiscal headroom is “diminished significantly” thanks to tariff-induced bond bonanza

Chancellor Rachel Reeves has likely had a significant amount of her fiscal headroom wiped out just two weeks after her Spring Statement thanks to Trump’s tariff announcements, Deutsche Bank has warned.

The £9.9 billion of fiscal headroom that was maintained at the Spring Statement is under threat from lower equity prices, the tariff shock, higher gilt yields, and higher borrowing, according to Samjay Raja, senior economist at Deutsche Bank.

“With regards to fiscal policy, chancellor Reeves finds herself in a similar place to

where she was at the start of the year,” Raja said, referring to gilts yields soaring in January.

“For all intents and purposes, her £9.9 billion headroom (against her primary stability rule) has likely diminished significantly – if not fully.”

In order to minimise the damage that Trump’s tariffs could bring, Raja expects that the government will use industrial policy to make UK businesses more competitive.

Secondly, Raja thinks the government will take steps to shield UK firms from tariff exposure: “In our minds, business support will be likely should the trade war continue into the next several weeks – especially if the UK is unable to secure a better trade deal.”

For the time being, Deutsche Bank does not expect the UK to go into a recession as a result of Trump’s tariff regime.

Rachel Reeves in front of a Union Flag

(Image credit: Bloomberg via Getty Images)

Baseline 10% tariffs will stay long-term, says Hassett

In an interview with CNBC, Hassett said: “Everybody expects that the 10% baseline tariff is going to be the baseline and it’s gonna take some kind of extraordinary deal for the president to go below there.”

It comes as Hassett says trade deals are on the table “for more than 15 countries”, two of which are “almost closed as of last week.”

The comments were made after Donald Trump announced a 90-day pause on the “reciprocal tariffs” on dozens of countries, but not China.

Elsewhere in the interview, Hasset admitted that elevating US Treasury yields added “a little more urgency” to the tariff pause, but did not cite it as a direct reason for the policy U-turn.

“There’s no doubt that the Treasury market yesterday made it so that the decision that, you know, it is about time to move was made with, I think, perhaps a little more urgency. But it was going to happen,” he said.

Former US treasury secretary: Tariffs are “the worst self-inflicted wound” in US history

Joe Biden’s treasury secretary Janet Yellen has called Donald Trump’s economic policy “the worst self-inflicted wound that I have ever seen an administration impose," in an interview with CNN.

She defended her and Biden’s record in office and said they left behind a “very well-functioning economy and President Trump has taken a wrecking ball to it”.

Elsewhere in the interview, Yellen argued that rising yields on Treasuries likely played a part in Trump’s decision to pause tariffs last night.

Yellen served as the 78th US Treasury Secretary for the entirety of Joe Biden’s premiership. Before that, she was the 15th Chair of the Federal Reserve from 2014 to 2018.

BREAKING: China raises tariffs on US imports to 125%

The Chinese finance ministry called the US tariffs “abnormally high”, but added that China would not match any further tariff rises by the US, “given that at the current tariff level, there is no market acceptance for US goods exported to China.”

“If the US continues to impose tariffs on Chinese goods exported to the US, China will ignore it,” they added.

Lin Jian, spokesman for China's Foreign Ministry, answers questions at a press conference

(Image credit: VCG via Getty Images)

Tesla halts new orders in China for its US-made cars

The Model 3 and Model Y, which are made in Tesla’s Shanghai factory, are still available to purchase in China.

UK GDP grew unexpectedly by 0.5% in February

Britain’s economy grew by 0.5% in February, surprising many analysts who expected a measly growth rate of 0.1%.

Much of the growth was thanks to the UK’s manufacturing sector as production output grew by 1.5%.

The positive figure is a welcome reversal from January, which had initially shown a 0.1% contraction – though the ONS has revised this to no growth in the latest release.

Chancellor Rachel Reeves said: “These growth figures are an encouraging sign, but we are not complacent [...] The world has changed, and we have witnessed that change in recent weeks.”

The change Reeves was referring to was, of course, Trump’s 25% tariffs on British cars, steel, and aluminium, alongside a blanket tariff of 10% on all imported goods.

The next set of GDP data will be published by the ONS on 15 May. This data will be in a better position to illustrate the impact of tariffs on Britain’s economy.

Read our full report on UK GDP in February, and what Trump’s tariffs could mean for future growth.

US stock futures tick slightly higher

Pre-market trading can be a good indication of how markets will act when they open, but nothing in financial markets can ever be truly predicted – not least in the last few days.

BREAKING: S&P opens downs 0.29%; Dow down 0.34%; NASDAQ down 0.24% as US markets start trading

Trump: America is “doing really well” thanks to tariff policy

In a post on his social media site Truth Social, President Trump has said that his tariff policy is “doing really well” for America.

He added: “Very exciting for America, and the World!!! It is moving along quickly.”

FTSE ends day up while Europe slumped

The same story can’t be said of European markets.

Germany’s DAX ended the day down 0.92%, France’s CAC index was also down 0.30% at the end of trading, while the EURO STOXX 50 ended the day down 0.66%.

Markets remain open in America, but here’s a snapshot of how they’ve fared in the first few hours of trading.

As Europe takes a breather after a turbulent week for global trade, we will pause our live blog for the weekend.