London’s FTSE 100 has risen in the first few minutes of trading on Tuesday, as optimism returned to the financial markets after several days of heavy losses.
The index, which tracks the UK’s top 100 listed companies, was up more than 1% shortly after markets opened on Tuesday. All other indexes on the London Stock Exchange were also in the green. It comes after Europe’s biggest stock markets opened and closed at a noticeable drop, with some falling up to 10% on the day.
It comes after China said it would “fight to the end” and take countermeasures against the United States to safeguard its own interests after President Donald Trump threatened an additional 50% tariff on Chinese imports.
The Commerce Ministry said the US‘ imposition of “so-called ‘reciprocal tariffs” on China is “completely groundless and is a typical unilateral bullying practice.” China, the world’s second-largest economy, has taken retaliatory tariffs and the ministry hinted in its latest statement that more may be coming.
“The countermeasures China has taken are aimed at safeguarding its sovereignty, security and development interests, and maintaining the normal international trade order. They are completely legitimate,” the ministry said. The US threat to escalate tariffs on China is a mistake on top of a mistake and once again exposes the blackmailing nature of the US. China will never accept this. If the US insists on its own way, China will fight to the end,” it added.
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Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Investors are waking up to a positive sight for once, with markets opening higher across a broad range of European indices and theFTSE 100 up 0.9% at the open.
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, having doubled down on China.
“Still, there is a glimmer of hope, as Japanese markets are up nearly 6% following news that trade talks will begin in a few days. The sooner deals are reached, the quicker companies and investors can gain some clarity on the lay of the land.”
Chris Beauchamp, chief market analyst at online trading platform IG, said: “It was almost inevitable that risk appetite would recover somewhat after the cataclysmic selling and doom-laden commentary of the past week.
“Stocks have rallied off their lows as investors seize on comments that indicate negotiations over tariffs are beginning.
“Sentiment remains fragile, and with China pledging to fight ‘to the end’ and the EU announcing fresh tariffs (albeit delayed for now) we are not out of the woods yet.”
One knock-on impact of tariffs has been concerns that the sudden barriers to trade will dent the already weak global economy. And a weak economy consumes less oil, hence why oil prices have fallen sharply.
Lower oil prices have two obvious consequences. The first is that it should lead to cheaper petrol and diesel prices, the longer it goes on, and as long as retailers pass on any savings. The second is that the price of oil feeds through to many firms’ costs, in one way or another.
If oil continues to fall that will put downward pressure on inflation. And any easing of inflation – if the economy weakens too – opens the way for a Bank of England rate cut.
Health secretary Wes Streeting has said the government has “made no bones about the fact we disagree with the decisions taken by the Trump administration” as they are “harmful to British interests”.
“What the prime minister has been doing – contrary to those who preferred he would take to Twitter [now X] and pick up placards – is showing the cool, calm, level-headed leadership required both to get the best possible trading relationship with the US as well as with our other trading partners,” he says.
The most talked about impact of Donald Trump’s tariffs has been on the cost of goods to the US, and consumers in the States. While the President is keen to play down the risk of levies on imports pushing up inflation, it seems inevitable that will happen.
What is far less certain is whether tariffs on US goods will somehow lead to higher prices elsewhere, including the UK. However, experts fear that as companies experience higher costs – or a hit to sales – they will try to recover it by putting up prices wherever possible.
Take tech giant Apple, for example, whose big selling iPhones are made in China and which are now subject to hefty tariffs when those handsets are imported back to the States. Some experts believe it could drive up the cost of the latest iPhones in the US by 30% or 40%, to as much as £1,700.
The same could be true of laptops, TVs and other gadgets through to clothing and elsewhere. Kevin O’Marah, co-founder and chief research officer at Zero100, a supply chain intelligence specialist, said: “There will be a dissipation of the costs.”
He also warned the massive upheaval to global supply chains would add to the impact. “Tariffs will increase prices across the board,” said Mr O’Marah. “Upstream costs will rise and companies will have no choice but to pass them along. Once big retailers start raising prices, others will follow. The herd effect will kick in. It will be easy to see the impact on a household budget.”
There could be a silver lining for mortgage borrowers as a result of Donald Trump’s tariff turmoil. That is because many fear the economy will take a hit from such huge disruption to global trade, which the UK will be caught up in. If that were to happen then the Bank of England will come under pressure to cut interest rates again, although it will depends on what happens to inflation as well. Financial markets now expect three interest rate cuts from the Bank this year. With its base rate at 4.50%, that could mean it coming down to 3.75%.
And falling interest rate expectations should feed through into cheaper mortgages, something that would be welcomed by hundreds of thousands of borrowers coming off cheaper home loans over the coming months and needing to bag a new deal.
Laith Khalaf, head of investment analysis at AJ Bell, said: “Interest rate expectations are falling as markets price in the potential economic damage from US tariffs, and the likelihood the Bank of England will respond with interest rate cuts. The market had been pricing in two interest rate cuts this year, but in short order that has now been ratcheted up to three.”
The two year swap rate – which influences the cost of fixed rate mortgage over the same period – has fallen from 4% on April 1 to 3.7% at the end of last week, according to Bank of England data. “We may therefore see falling interest rates feeding into mortgage pricing before too long,” said Mr Khalaf.
Europe’s biggest stock markets opened and closed at a noticeable drop on Monday, with some falling up to 10%. Howeve, there has been a slight rebound this moring.
The Health Secretary has said that patients’ data is “not for sale” as part of trade negotiations with the US but anyone who wants to who use it for research purposes should pay for access.
“The NHS is not for sale and our patients’ data is not for sale,” Wes Streeting told BBC Breakfast.
The health data research service announced by the Prime Minister on Monday is underpinned by the principle that our data should be “publicly owned”, he said.
“At the heart of that health beta research service are the values and the principles that underpin our National Health Service, which is our data should be… publicly owned, it belongs to all of us. That data should only be shared for research purposes with our consent.
“And where we are working with scientists to generate the breakthroughs in science and research, the new treatments and new technology, we should get the benefit from that, and not just from being at the front of the queue, but if people want to use our data for research purposes they should have to pay in order to access that data and that research.
“The data must always belong to us. It should always be held securely. It should only be shared with our individual consent. It should always be anonymised.”
The stock market volatility is having an impact on millions of UK workers, even if they don’t realise it. That is because it affects the value of workplace pensions, or at least the element that is invested in stocks and shares.
The amount will depend on what pension fund workers have, and the extent to which they are exposed to equities. It is often the case that the younger workers are, the greater their exposure, but also the longer they have to claw back any losses. The dominance of US markets also means that what happens on Wall Street feeds through to the value of workers’ pension pots here.
With global stock markets having shed around 10% of their value since President Trump took office in mid-February, it means pension savers could be sitting on a chunky paper loss. For a UK worker with a £35,000 pension pot, that means around £3,500 knocked off the value of their retirement fund. In reality, not all their fund will be invested in stock and shares, but experts say it gives an indication of the impact.
US tariffs provide “another layer of challenge” for ensuring the supply of medicines, the Health Secretary has said.
Wes Streeting told Sky News: “Until this trade war erupted, we’d already had issues with medicines production and supply internationally. We are constantly watching and acting on this situation to try and get medicines into the country, to make sure we’ve got availability, to show some flexibility in terms of how medicines are dispensed, to deal with shortages.
“But whether it’s medicines, whether it’s parts for manufacturing, whether it’s … the ability of businesses in this country to turn a profit, this is an extremely turbulent situation.”
The steps the US has taken are ”unprecedented in terms of global trade”, he said. “As ever in terms of medicines, there’s a number of factors at play.
“There have been challenges in terms of manufacturing, challenges in terms of distribution, and if we start to see tariffs kicking in, that’s another layer of challenge, but we watch this situation extremely closely. We work on a daily basis to make sure that we have the medicine supply this country needs.”
The mayhem unleashed by Donald Trump’s latest wave of trade tariffs is showing no sign of easing.
And the longer it goes on, the more chance it has of hitting millions of ordinary people in the pocket. For while it might seem that decisions made in the White House are remote from everyday life for many, the reality is that they have huge consequences, from the cost of a mortgage to the latest iPhone.
Read more: Donald Trump’s tariffs could push up price of iPhones but lead to cheaper mortgages
Donald Trump’s threat of increasing tariffs by another 50% came after China said it would retaliate and it means the overall levy would reach 104%.
“If China does not withdraw its 34% increase above their already long term trading abuses by tomorrow, April 8th, 2025, the United States will impose ADDITIONAL Tariffs on China of 50%, effective April 9th,” Trump wrote on Truth Social. “Additionally, all talks with China concerning their requested meetings with us will be terminated!”
If Trump implements his new levies on Chinese products, US tariffs on its goods would reach a combined 104% as they would also include the 20% tariffs announced as punishment for fentanyl trafficking and his 34% tariffs announced last week.
Not only could that increase prices for American consumers, it could also give China an incentive to flood other countries with cheaper goods and seek deeper relationships with other trading partners, particularly the European Union.
The S&P 500 plunged to its 11th worst 3-day drop in history, with figures more dire than those reported during World War 2 and the Covid-19 pandemic.
US stocks nosedived at Monday’s open as the fallout from Donald Trump‘s tariffs intensified, sending the stock market index into bear market territory. The S&P slumped 3.4% having earlier dipped as low as 4% – marking a 20% drop from February’s record high. It comes amid fears the impact of Donald Trump’s shock tariffs on international trade would trigger a global recession.
The Nasdaq Index fell 3.9%, while trading volumes surged as Wall Street continued to reel from Friday’s chaotic sell-off. The Dow Jones Industrial Average plummeted 1,191 points, or 3.1%, to 37,123.
Goldman Sachs’ warning of a US recession due to the trade war added to the turmoil, with President Trump showing no signs of backing down. Bloomberg reported Wall Street had lost 13% of its value since Thursday – the third-worst three-day slump on record, trailing only the early days of Covid-19 and the 2008 financial crisis.
Sir Keir Starmer warned the United States tariffs were “not a passing phase” as he visited Jaguar Land Rover’s West Midlands plant, but urged workers at the car maker to remain calm.
“This is a moment for cool heads, nobody wins from a trade war, you know that,” he said on Monday.
The luxury car maker has been hit by the US tariffs, with the Prime Minister insisting moves to ease the transition towards phasing out petrol and diesel cars was a “statement of intent” in backing Britain’s automotive industry.
And he said now is the time to “rise together as a nation” in the face of growing uncertainty. Mr Starmer told workers at the motoring giant – which will be hit by a 25% tariff on exports to the US: “Old assumptions that we’ve long taken for granted simply don’t apply any longer.” He said the US President’s measures are bad news for British business and would pose a “huge challenge”.
Donald Trump has ordered the world not to be “weak” and “stupid” despite economies across the globe being in freefall amid growing fears of a recession.
The US president took to Truth Social to insist the tariffs should have been done “decades” ago. His post came shortly before the markets opened in Wall Street today – when it was revealed US stocks had plummeted once again.
Trump’s post read: “The United States has a chance to do something that should have been done DECADES AGO. Don’t be Weak! Don’t be Stupid! Don’t be a PANICAN (A new party based on Weak and Stupid people!). Be Strong, Courageous, and Patient, and GREATNESS will be the result!”
Sir Keir Starmer will be questioned by senior MPs on Tuesday amid turmoil in global markets caused by US tariffs, which Donald Trump has insisted he will not pause.
The Prime Minister is expected to hold a Cabinet meeting of his most senior ministers in Downing Street on Tuesday morning, before he heads to Parliament, where he will appear before the Liaison Committee of senior parliamentarians on the last day the Commons sits before it heads into the Easter recess.
The global impact of Mr Trump’s tariffs is likely to be on the agenda for the committee, where Sir Keir may also be questioned about the war in Ukraine, conflict in the Middle East, and the US president’s announcement that America will hold direct talks with Iran about its nuclear programme.
As he spoke to reporters in the Oval Office on Monday, Mr Trump indicated he was not open to the idea of pausing tariffs to allow for negotiations with other countries.
The UK is among the nations arguing its case for a carve out from the trade tax on goods going into the US.
The President has imposed a 10% tariff on US imports of British goods, along with the 25% tariff on cars and separate import taxes for steel and aluminium.
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