President Trump blames China for him losing re-election in 2020

SAUL LOEB/AFP/GETTY IMAGES

President Trump has hastened the international showdown that could define his presidency — conflict with China.

His threat to levy an extra tariff of 50 per cent on top of the 34 per cent announced on “liberation day” unless Beijing backs down from its retaliatory measures amounts to economic shock and awe.

A refusal to negotiate further with China suggests a president dug firmly into his tariff trench and willing to take the highest level of risk with the economy to stay there.

• Read in full: Trump dares China to blink first. What if it doesn’t?

Democrats have reacted with anger to President Trump’s insistence that his tariffs are here to stay.

Chuck Schumer, the Senate minority leader, said that the White House was “teeing up a nationwide recession”.

“I urge the president to back off from his disastrous tariffs immediately, he should put down the golf clubs and pick up the papers, because the disaster he has created is anything but great,” Schumer said, referencing the president’s consecutive days golfing at his Florida club over the weekend.

Schumer also called on John Thune, the Republican leader in the Senate, to allow a vote on a bipartisan bill to require congressional approval for any new tariffs. “The Republican leader should make passing tariff legislation the top priority of the Senate,” he said.

Trump said that no country would have approached the White House to negotiate a deal “if I didn’t do what I did over the last couple of weeks”.

He pointed to Israel as an example, which has offered to cut its tariffs on American products.

Trump added that countries were now “offering things to us that we’d never thought to ask for”.

President Trump held a press conference with Binyamin Netanyahu in the Oval Office

SAUL LOEB/AFP/GETTY IMAGES

President Trump said that his imposition of tariffs was the “only chance we’re going to have to reset the table”.

He said that “tremendous progress” was being made with multiple countries, who were “getting beat badly” and have approached the White House to negotiate a deal.

“I see a beautiful picture at the end,” Trump said, adding that the US was going to emerge from the current economic turmoil in a much stronger position.

President Trump has said that he is “not worried” about the prospect of America’s allies turning to China to establish new economic ties. “They don’t want to be in the hands of the Chinese,” he added.

Trump also said he would raise tariffs against China by a further 50 per cent if it does not pull back on its reciprocal tariffs by midday tomorrow.

President Trump said that the European Union has taken advantage of the US for decades.

“They don’t take our cars, our agriculture products, they don’t take anything practically,” he said, adding that the bloc had been “very tough over the years”.

He said the EU had been “formed to damage America” and it was time to establish a “fair and reciprocal” relationship.

When asked about a potential pause on tariffs, President Trump said: “We’re not looking at that.”

He added that the US had been “ripped off by many countries over the years” and that “we can’t do it anymore”.

Trump also said that it was an “honour” to defend America’s economic interests against the rest of the world. “We’re going to have one shot at this,” he added.

Binyamin Netanyahu, the Israeli prime minister, has said that he plans to eliminate his country’s trade deficit with the United States “very quickly” as he seeks a trade deal with the White House.

Speaking from the Oval Office alongside President Trump, Netanyahu said: “We will eliminate the trade deficit with the US … We will do it very quickly and we will eliminate trade barriers.”

“Israel can serve as a model for many countries,” he added. “I recognise the position of the United States. I’m a free trade champion and free trade has to be fair trade.”

Israel is facing 17 per cent tariffs, and had a $7.4 billion trade surplus with the US last year.

Stephen Miran, the White House’s leading economics adviser, has said that trade concessions offered by foreign countries would be “welcomed by the United States”.

It marks a reversal of the position outlined earlier today by Peter Navarro, a trade adviser to the Trump administration, who criticised the European Union and Vietnam for pursuing “zero-for-zero” tariff deals.

Miran, speaking at an event at the Hudson Institute, a Washington think tank, conceded that there “are conflicting narratives because everybody has got an opinion. And that’s fine.”

He added that President Trump had been “very clear that we want increased access to foreign markets that would boost our exports”.

More than 50 countries have opened negotiations with the US to reduce tariffs, the administration has said as it announced the start of talks with Japan.

Scott Bessent, the treasury secretary, wrote on X that President Trump had asked him to start talks to “implement the President’s vision for the new Golden Age of Global Trade” with Shigeru Ishiba, the Japanese prime minister.

He said the talks would cover “tariffs, non-tariff trade barriers, currency issues, and government subsidies”.

Jonathan Reynolds, the business secretary, has said that the government is not seeking to dilute Britain’s online safety laws in order to seek trade concessions from the White House.

It has been reported that the government would commit to a review on the implementation of the Online Safety Act and the Digital Markets, Competition and Consumers Act, which Washington believes imposes unfair burdens on American tech companies.

However, Reynolds told Sky News that “some of that speculation is misplaced”, adding: “I think it’s important to say the US does not have an agenda about making our children less safe.”

He also called for caution and diplomacy rather than hostility with regard to President Trump’s tariffs. “We shouldn’t panic,” he said. “We shouldn’t escalate a trade war as some colleagues, other political parties, have asked me to do. That would be the wrong thing.”

Hillary Clinton, the presidential candidate who lost to Donald Trump in 2016, has taken to X to criticise the president’s tariff policy.

A senior White House trade adviser has indicated that countries pledging to drop their tariffs won’t be enough to change President Trump’s policy.

In an interview with CNBC, Peter Navarro singled out the European Union, which said today that it had offered the US a “zero-for-zero” tariff deal on cars and industrial goods. The bloc is facing 20 per cent tariffs.

“You steal from the American people every which way is possible,” Navarro said. “So, don’t just say we’re going to lower our tariffs.”

In reference to Vietnam, which has offered to scrap its tariffs on America, Navarro said: “When they come to us and say, we’ll go to zero tariffs, that means nothing to us, because it’s the non-tariff cheating that matters.”

The European Commission has proposed counter-tariffs of 25 per cent on a range of US goods in response to President Trump’s tariffs on steel and aluminium, Reuters reported today.

Some of the tariffs would come into effect on May 16 and others later in the year, on December 1, it added.

Bourbon whiskey was removed from the original list discussed by the commission, according to the report.

President Trump with Binyamin Netanyahu in Washington earlier today

LEAH MILLS/REUTERS

As President Trump welcomes Binyamin Netanyahu to the White House, Gabrielle Weiniger in Tel Aviv reports on Israel’s plans for the devastated Gaza Strip.

Given that one of his neighbours on the outskirts of Hebron is Itamar Ben-Gvir, the radical settler who now sits at the right hand of Binyamin Netanyahu, Daniel Deloya is growing more hopeful with each passing day that his dreams for Gaza could soon materialise.

Like Ben-Gvir, who rejoined Netanyahu’s cabinet only once Israel reignited its war on Hamas, Deloya has long called for the resettlement of the Palestinian territory by force. Many of those living in the West Bank, an area known in Israel as Judea and Samaria, believe that a Jewish presence in Gaza embodies a right to return to a land they have called home since Biblical times.

As Netanyahu prepared to visit President Trump on Monday, Deloya, a 41-year-old father of six who was once a political candidate in Kiryat Arba, said Israel was on the cusp of giving the US president the “riviera he dreams of” in Gaza. It was a reference to Trump suggesting the forced removal of Palestinians and the creation of a tourist resort among Gaza’s ruins.

• Read in full: How Netanyahu’s Washington visit could ignite Trump’s riviera dream

“The history of the world is but the history of great men,” Thomas Carlyle declared in his 19th-century work On Heroes, Hero-Worship and the Heroic in History. In his book he identified such men as the Prophet Muhammad, Martin Luther, Oliver Cromwell and (of course) Napoleon and attributed the world’s great accomplishments to them. Each man was somehow providentially in tune with the zeitgeist — and had the spirit and will to act accordingly.

What utter rot. Carlyle’s once influential work has been rightly debunked by generations of historians and could hardly be less fashionable today. History is now properly seen as a product of vast impersonal forces: the dizzying complexities of economic development; the arrival of transformative new technology; geographic and climatic shifts. History is viewed from the bottom up and not just the top down. To the 21st-century ear, Carlyle’s fawning promotion of hero-worship sounds like a precursor to fascism.

And yet I have found myself thinking about Carlyle again these past few weeks as President Trump upends global trade and dismantles the western alliance. Never in my lifetime can I remember the whims and impulses of one man so profoundly affecting every other person on the planet.

• Read in full: We thought the 19th-century theory that one man could reshape the world had been debunked

President Trump has ordered a fresh review of a takeover deal that would see US Steel acquired by Japan’s Nippon Steel after it was originally blocked by the Biden White House.

Trump directed the Committee on Foreign Investment in the United States, a cross-government body, to look again at the proposal to decide “whether further action in this matter may be appropriate”.

US Steel shares leapt 11 per cent in response to the announcement.

Biden blocked the $14.9 billion deal in January on national security grounds.

Trump has imposed sweeping tariffs of 25 per cent on all steel imported into the US.

President Trump and Binyamin Netanyahu, the Israeli prime minister, have cancelled a joint press conference that was scheduled for this afternoon.

The White House did not offer an immediate explanation for why the full press conference would not take place, but Trump and Netanyahu were still expected to appear and make comments to reporters before their Oval Office meeting.

Netanyahu is the first foreign leader to visit Trump since he unleashed tariffs on countries around the world last week.

Whether the Israeli prime minister succeeds in bringing down or eliminating Israel’s tariffs — set at 17 per cent by Trump last week — remains to be seen, but how it plays out could set the stage for how other world leaders try to address the new tariffs.

Oil prices fell by 2 per cent to a nearly four-year low today over concerns that President Trump’s tariffs could push economies into recession and dampen global demand for energy.

As markets closed in the UK, Brent Crude was down by $1.24, or 1.9 per cent, to $64.34 per barrel.

Metal prices have also fallen over the same fears, with copper prices briefly touching their lowest level in over 16 months before ending down by 0.5 per cent to $8,734.5 per metric ton by 4pm.

Protesters form a human banner on Ocean Beach in San Francisco

SAN FRANCISCO CHRONICLE/AP

Hundreds of thousands of protesters flooded the streets in all 50 American states over the weekend to oppose President Trump and Elon Musk, calling for an end to a “billionaire takeover”.

The demonstrations were planned under the slogan “Hands Off!” in major US cities by civil rights organisations, labour unions, LBGTQ+ advocates and veterans groups.

Organisers demanded “an end to the billionaire takeover” of the Trump administration while demonstrators voiced anger over the administration’s moves to sack thousands of federal workers, close Social Security Administration field offices, effectively shutter entire government agencies, deport immigrants, scale back protections for transgender people and cut funding for health programmes.

• Read in full: ‘Hands off’ protests in every US state against Trump and Musk

Larry Fink, the chief executive of the investment firm Blackrock and one of the world’s most powerful financiers, has warned that the United States “is probably in a recession right now”.

Speaking at the Economic Club of New York today, Fink said that the US economy was weakening and most Americans did not understand the full impact of tariffs.

According to the club’s X account, Fink said that the recent stock market turmoil was a buying opportunity but added “that doesn’t mean we can’t fall another 20 per cent from here”.

Sir Richard Branson has called Trump’s tariffs a “colossal mistake”, warning that prices will rise in the US while small and medium-sized businesses go bankrupt.

In a post on X, Branson said that the tariffs had led to “catastrophic results for ordinary Americans and for the rest of the world”.

“Retirement savings will be wiped out at an enormous scale,” he added. “This is the moment to own up to a colossal mistake and change course. Otherwise, America will face ruin for years to come.”

Bangladesh has offered to buy more US agricultural products such as cotton, wheat, corn and soybeans in a bid to avoid the 37 per cent tariff placed on its exports to the US by President Trump.

Muhammad Yunus, who heads Bangladesh’s interim government, asked for tariffs to be postponed for three months to allow it to increase imports from the US.

Yunus added that he was planning further tariff cuts on US products such as gas turbines, semiconductors and medical equipment.

President Sheinbaum added she would not rule out tariffs on US goods

JOSE MENDEZ/EPA

Mexico has not ruled out retaliatory tariffs on American steel and aluminium but wants “to avoid reciprocal tariffs as much as possible”, President Sheinbaum said.

“We won’t rule it out, but we prefer continuing with talks,” she said, adding that placing its own tariffs on American goods, as Canada has done, would increase prices in Mexico.

Speaking at her morning press conference, Sheinbaum said that Marcelo Ebrard, Mexico’s economy minister, would continue negotiations with American officials in Washington.

Comment by Mehreen Khan, Economics Editor

Over the last few months, this column has tried to make sense of President Trump’s attempt at a Great Rebalancing of global trade and the apparent exorbitant “burden” of the dollar on the US economy.

A subject I’ve stayed away from is the risk of a clash between the liquidationist strategy of the president and the Federal Reserve, the US’s independent central bank. But in the spirit of taking Trump both literally and seriously, a collision between the US executive and its most important economic institution is now shaping up to be the new immediate and ever-present danger to the US economy and its financial stability. We may be hurtling towards an “all bets are off” moment for the world economy faster than even sweeping tariffs can conjure.

Why so? On Monday, Trump demanded the Fed “CUT INTEREST RATES … AND STOP PLAYING POLITICS!” in a post on his Truth Social platform. Trump’s demand followed interventions from his allies over the weekend that justified raising trade barriers to the highest level in more than a century, because they will usher in an era of low interest rates.

Read in full: Tariffs will make it impossible for the Fed to come to the US’s rescue

The FTSE 100 has closed down by 4.4 per cent, after a nearly 5 per cent fall on Friday. The drop in London’s leading index was broad-based, with only five out of the 100 stocks ending the day up.

The FTSE 250, which contains fewer internationally focused companies, fell by a smaller 3.3 per cent, following a drop of 4.4 per cent on Friday.

President Trump’s threat of additional tariffs on imports from China will add to an already steep rate, the White House told AFP today.

Trump said in a Truth Social post that he would impose further tariffs of 50 per cent on China from April 9. Shortly afterwards, the White House confirmed that these would add to the 34 per cent rate that Trump had already planned to impose from Wednesday — taking the overall additional duties imposed on Chinese imports this year to 104 per cent.

Analysis by Thomas Saunders

Trump’s threat to levy additional tariffs on China shows that he remains unbowed by sinking stock markets and is willing to escalate his trade war with China. The S&P 500, Dow Jones Index and Nasdaq dropped immediately after he issued his threat on Truth Social.

However, his statement that the US is already in negotiations with other countries might have provided some respite, and all three indices have nearly recovered their initial drops, though they remain in negative territory overall.

President Trump has said that if China does not withdraw its retaliatory tariffs, “the United States will impose additional tariffs on China of 50 per cent, effective April 9th”.

Posting on Truth Social, Trump said that that all talks with China would be terminated unless it withdrew its retaliatory tariffs of 34 per cent on US imports. He added that negotiations with other countries which have requested meetings will begin taking place immediately.

Sir Keir Starmer said he would back carmakers such as Jaguar Land Rover “to the hilt”

KIRSTY WIGGLESWORTH/AP

Sir Keir Starmer has said that now is a moment for “cool heads” as global markets plunged in response to President Trump’s sweeping tariffs.

The prime minister said that the UK had to “rise together as a nation” in the face of a new era of global instability.

Speaking at a Jaguar Land Rover plant in the West Midlands, Starmer said: “These are challenging times, but we have chosen to come here because we are going to back you to the hilt.”

He said the visit was a “statement of intent”, showing the government’s support for an industry which has been hit with a 25 per cent tariff by Trump on top of the 10 per cent blanket tax on British exports.

Starmer added: “This is a moment for cool heads, nobody wins from a trade war.”

By David Charter, Assistant Editor (US)

President Trump has shared several posts on his Truth Social account in the past hour praising his tariffs policy. Perhaps most notable is an approving quote from the Fox Business host Maria Bartiromo, who said that “President Trump will not bend”.

In the clip of her programme, she adds: “He told me a number of times he is trying to build the economy and make it independent as opposed to relying on China for things like prescription drugs.”

In another post, Trump quotes John Barrasso, a Republican senator from Wyoming, setting out a justification for the tariffs: “I appreciate what the president is doing on tariffs … Australia has sold $29 billion worth of beef in the United States, and we haven’t been able to sell one hamburger in Australia because of barriers … You look at these numbers, and the ranchers of Wyoming are saying thank you Mr President, it is about time!”

By Jon Rees, Business News Editor

US stock markets swung wildly when they opened today with the main indexes opening sharply down only to rise again within the hour and then fall again.

The swings followed a report on CNBC that President Trump was considering a 90-day pause to his tariffs, which saw share prices rise sharply. However, the White House subsequently knocked back the report as “fake news” and the fall started again.

In early trading, the tech-heavy Nasdaq Composite was up 0.18 per cent after having opened down 3.66 per cent. The S&P 500 opened down 4.65 per cent but the sell-off slackened to a fall of 1.59 per cent.

The Dow Jones 30 Industrials Average was down 2.19 per cent after opening down 3.57 per cent.

Trump has said foreign governments would have to pay “a lot of money” to get the tariffs removed, opening the possibility that the tariffs are negotiable.

President Trump is now looking forward to his main morning business — a visit from the World Series-winning baseball team.

“Seeing the World Champion Los Angeles Dodgers at 11:00 A.M. Exciting!!! DJT”, the president wrote on his Truth Social platform.

The Dodgers’ star player, Shohei Ohtani, is Japanese, which could be awkward since Trump’s second post of the morning betrayed nervousness about the reaction in Asia to his tariffs.

“Countries from all over the World are talking to us,” Trump posted. “Tough but fair parameters are being set. Spoke to the Japanese Prime Minister this morning. He is sending a top team to negotiate! They have treated the US very poorly on Trade. They don’t take our cars, but we take MILLIONS of theirs. Likewise Agriculture, and many other ‘things’. It all has to change, but especially with CHINA!!!”

President Trump’s trade war has prompted one of the largest falls in the stock market since the Second World War

ANDREW HARNIK/GETTY IMAGES

President Trump’s tariffs have wiped trillions of dollars off the value of stock markets worldwide and amplified concerns that the global economy is hurtling toward a recession.

According to analysts, the decline in US stocks has been among the largest since the Second World War, surpassed only by the 1987 Black Monday stock market crash, the 2008 global financial crisis and the early days of the Covid-19 pandemic.

Sharp stock price falls after Trump announced his package of “reciprocal tariffs” last week show no signs of letting up: on Monday, London’s FTSE 100 slid by as much as 6 per cent, while some shares in Asia had their worst day since the late 1990s. Below we examine what is behind the historic declines.

• Read in full: Why are share prices falling and what does it mean for the UK?

The range of tariffs enacted last week by President Trump is hitting €380 billion (£325 billion) worth of EU exports to the United States, Maros Sefcovic, Brussels’s trade commissioner, has said.

He added that the European Commission had worked on a list of countermeasures which will be sent to EU member states later today and could come into force next week.

“The vote is set for April 9 with the final list adopted on April 15 and the duties on products will kick in on that day,” he said.

Traders at the New York Stock exchange were greeted with further losses when markets opened this morning

BRENDAN MCDERMID/REUTERS

BRENDAN MCDERMID/REUTERS

As expected, the S&P 500, the benchmark stock index in the US, is now in a bear market after falling 3.4 per cent to 4,903.71 points at the opening bell on Monday.

It had already dropped by 6 per cent on Friday and is now down more than 20 per cent from the record high it hit in February. A bear market is when an index has fallen by 20 per cent or more from its most recent peak.

The rest of Wall Street was also in the red. The Dow Jones Industrial Average opened 3.11 per cent lower at 37,123.27 on Monday, while the Nasdaq retreated by 3.9 per cent to 14,979.26.

Shortly before US stock markets opened, President Trump posted on his Truth Social site exclaiming: “Don’t be weak! don’t be stupid!”

It was not clear whether he was appealing to traders and investors, his supporters or advisers.

“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!” he wrote.

Global stock markets are likely to reach the “maximum point of uncertainty today”, strategists at Deutsche Bank believe.

They argue that “peak volatility” has already arrived because there are unlikely to be many new events that exacerbate the situation — the US has set out its position, which Deutsche thinks “could be negotiated”; China has already retaliated; and the European Union, it suspects, will be wary of escalating the trade war given “the potential for enormous self-harm”.

“With rising pressure on the US administration from markets and falling approval rates and with fewer new unknowns, we think we have reached peak volatility,” the strategists concluded.

British motorists could benefit from falling petrol and diesel prices as the price of oil plummeted.

Simon Williams, the RAC’s spokesman on fuel, said drivers should expect to see cuts of up to 6p a litre at the pumps before the Easter weekend. He predicted that petrol should drop from its current UK average of 136p to 130p a litre and diesel from 143p to 137p.

Williams said: “As long as the barrel carries on trading around or below the 65 dollar mark, retailers will be obliged to pass on the savings they’re benefitting from to their customers on the forecourt.”

The price of Brent crude oil fell to its lowest level since April 2021 on Monday, with one barrel costing $63.49. The price falls are the result of the Opec+,an alliance of oil-producing countries, agreeing to increase output.

President Trump’s tariff policy forms part of a “wider negotiation strategy” and won’t be fully adopted as currently outlined, Nigel Farage has claimed.

The Reform UK leader, a close ally of the US president, said that things will be “different in three months time” after a period of negotiation.

Speaking to reporters in Doncaster, Farage said: “I still think that this big tariff threat [will] look different in three months time. He’ll use it as a big negotiating tool. I think we’re better positioned to come out of this with a deal than almost any other country.

“So, short term it’s painful, but what it does do, it exposes the fact that not being in the European Union does have advantages and ones that we ought to use.”

Farage made the claim despite Trump allies stating at the weekend that steeper reciprocal tariffs are still on track.

Traders are forecasting an extra round of interest rate cuts to offset the impact of President Trump’s tariffs on the US economy.

Investors briefly priced in five 25-basis-point interest rate cuts by the Federal Reserve, the American central bank, which would take the federal funds rate down to a low of 3 per cent. Rates currently range from 4.25 to 4.5 per cent.

Last week, the Fed was expected to only cut rates three times in 2025, but on Friday four rounds of cuts were predicted.

In a post on Truth Social, Trump urged the Fed to move forward with rate cuts: “Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place.”

Goldman Sachs and JPMorgan have warned of a growing risk of recession in the US owing to the tariffs.

Giorgia Meloni has attacked EU environmental regulations as “internal tariffs” that rival President Trump’s 20 per cent tariff on EU imports.

In a speech the Italian prime minister said: “We will again strongly ask Europe to reconsider its ideological green deal rules and the excessive regulation in every sector which today constitute real internal tariffs.”

• Fightback begins as EU bets markets will force Trump tariff retreat

Meloni’s injection of Euroscepticism into her speech, as well as her call for “dialogue” with the US, suggests she wants to distance herself from more belligerent EU politicians and prepare the ground for a possible visit by JD Vance, the US vice-president.

Italian media also speculated on Monday that Meloni may travel to Washington before then for a meeting with President Trump to press for a deal on tariffs.

“We are screwed either way,” the director of the Institute for Fiscal Studies has said, regardless of whether President Trump pares back his tariffs or not.

Paul Johnson told Times Radio that we are in an “unprecedented position where one person with extraordinary power, and a wholly irrational attitude to economic policy, is doing a series of unpredictable things”. However, he said that he believed the markets would respond positively should a deal to reduce the levies materialise.

Johnson added: “We are in for a period of much slower growth, quite possibly a recession as result of the actions of one man.

“And it is not obvious what there is in the US constitution that could hold him back or stop him or move him in a different direction.”

The FTSE 100 had started to claw back some of its early morning losses, but it has fallen back again over the past half an hour.

The index, which fell by 5 per cent on Friday, is down by a further 4.5 per cent to 367,689.35 points today.

Wall Street is expected to open down when trading begins in New York at 2.30pm GMT. The S&P 500, which tracks America’s biggest companies, looks set for its largest three-day fall since the 2008 financial crash.

“The sell-off has now been so stark that it’s hard to see the [Trump] administration continuing to brush it off,” said Thomas Mathews, head of Asian markets at Capital Economics. “We still think he will lower the dosage by paring back his tariffs. But, if he doesn’t, equities could get a lot sicker yet.”

The Times economics editor Mehreen Khan speaks on The Story about President Trump’s tariffs and the problem with the theory behind them.

The prime minister’s official spokesman said he had instead held calls with other leaders — including those from Canada, Germany, France and the European Commission — on Saturday and Sunday.

Asked if Sir Keir Starmer was trying to persuade Canada and the EU not to retaliate over the tariffs, the spokesman said it was “up to every country to respond in the way they see fit”.

He added that the last few days had not “fundamentally changed the calculation” when it came to the government’s ambitions on an EU reset and a close trading relationship with the bloc.

President Trump has called on the Federal Reserve to cut interest rates.

“The slow moving Fed should cut rates,” Trump wrote in a post on his social media platform Truth Social.

Trump also attacked China as “the biggest abuser of them all” and criticised Beijing for placing retaliatory tariffs on the US, despite his warnings not to.

“They’ve made enough for decades taking advantage of the Good OL’ USA.”

The Kremlin has said the slump in global oil prices is an “extremely turbulent and tense” situation for Russia.

Oil and natural gas sales make up a third of Russia’s national budget revenues and a prolonged decline in prices could harm Moscow’s ability to fund its war in Ukraine. “We are very closely monitoring the situation,” Dmitry Peskov, the Kremlin spokesman, said.

President Trump has also threatened to impose secondary tariffs on countries such as China and India that continue to purchase Russian oil, unless President Putin agrees to a ceasefire in the war.

The financial markets’ so-called “fear gauge” has risen to levels not seen since the early weeks of the coronavirus lockdown.

The Vix index topped 60 in the early hours of Monday which, if it were to maintain that level until the end of the day, would be its highest closing value since April 2020. On March 25, the index was at 17, a reflection of how quickly the outlook has changed.

The index is a proxy for investor expectations of volatility in the US stock market over the coming 30 days. Any reading above 30 is typically associated with extreme volatility and has only happened a handful of times in the past few years.

The head of one of the biggest banks in the world has warned that President Trump’s tariffs “will likely increase inflation and are causing many to consider a greater probability of a recession”.

In his annual letter to shareholders, Jamie Dimon, the chief executive of JPMorgan Chase, added that “the quicker this is resolved, the better, because some of the negative effects increase cumulatively over time and would be hard to reverse”.

Dimon said that while the possibility of a recession in the US “remains in question”, the levies would “slow down growth”.

Elon Musk, a key adviser to President Trump, has shared a video which extols the virtue of free market economics.

The Tesla owner, who runs the Department of Government Efficiency, has already called for a “zero-tariff zone” between Europe and the United States in a sign of tension within the US administration.

On his social media platform X, Musk shared a video of the late American economist Milton Friedman, an influential advocate for free markets during the 20th century.

Musk and Tesla have already suffered because of the tariff plan. His company ships several car parts over from China, which faces tariffs of 34 per cent.

Wall Street is set to officially enter into a bear market when stock markets in New York open at 2.30pm GMT.

The benchmark S&P 500, which tracks America’s largest listed companies, is currently forecast to open 3.2 per cent lower at 4,909 points.

That would leave the index 20 per cent below the record high it achieved in February. A bear market is when an index has fallen 20 per cent or more from its most recent peak.

Investors are growing increasingly worried that the US, the world’s largest economy, will soon fall into recession as a result of the trade war and drag the rest of the global economy with it.

Goldman Sachs has raised its probability of a US recession for the second time in less than a week.

The investment bank’s analysts now think there is a 45 per cent chance that the world’s largest economy will fall into recession within the next 12 months, up from 35 per cent only a few days ago.

Higher custom tariffs on an estimated 60 countries are due to come into effect on Wednesday. Goldman said if most of those tariffs are implemented “we expect to change our forecast to a recession”.

Its updated forecasts partly reflects a “sharp decline” in foreign tourist numbers it has recorded since the tariffs were announced. “[We] had already assumed forceful retaliation by foreign governments, but we had not accounted for the effects of a consumer-led response,” Goldman said.

The price of gold, typically considered a safe haven asset, has continued to decline after hitting a record high last week.

Futures fell to $3,041 an ounce, down from a peak of $3,120 on April 2, as the market turmoil prompted investors to liquidate some of their holdings to meet margin calls. The spot price was down $8.65, or 0.3 per cent, at $3,029.

Expectations of interest rate cuts and geopolitical tumult triggered a rally in gold last year, as investors flocked to safety. The price has also been supported by central bank demand, with China, a key buyer, building its bullion reserves for a fourth straight month in February.

• Why Gen Z are investing in gold

By Patrick Hosking, Financial Editor

Three trading days into this global sell-off and we have yet to see a major investor casualty. That clean sheet is unlikely to last if asset prices keep tumbling. Market shocks have a horrible habit of exposing the over-leveraged, the reckless and the out-and-out fraudsters.

The hedge fund darling Long-Term Capital Management was toppled by the Asian markets crisis of 1997; Bernie Madoff’s Ponzi scheme was exposed by the financial crisis of 2008; the hedge fund Archegos imploded as markets tanked at the start of the Covid pandemic.

Only when the tide goes out do you find out who’s been swimming with no trunks, Warren Buffett, the American investor, famously remarked.

The triggers for many collapses are margin calls, when counterparties to leveraged bets (and lenders to the hedge funds who take them) demand cash from investors if they want to keep their wagers open. They become forced sellers at just the wrong moment, whether the underlying assets are shares, commodities or junk bonds.

Margin calls will now be flooding into hedge funds from prime brokers — banks that provide the credit for their bets — according to analysts. One problem for regulators in this highly opaque system is that it is very hard to see who is most leveraged.

A Chinese government spokesman has called US tariffs “economic bullying”.

Lin Jian said that threats and pressure from America were not the right way to deal with Beijing. The tariffs are “typical unilateralism and protectionism, and economic bullying”, Lin told reporters.

Last week, Trump introduced an additional 34 per cent tariff on Chinese goods, bringing the total duties on China this year to 54 per cent. China has retaliated with a series of countermeasures.

“The abuse of tariffs by the United States is tantamount to depriving countries, especially those in the global south, of their right to development,” Lin added.

Taiwan has refused to retaliate in the face of President Trump’s tariffs

RITCHIE B. TONGO/EPA

Shares in the Taiwan Stock Exchange plunged by 9.7 per cent on Monday, their heaviest loss on record, after China’s retaliatory tariffs on the United States.

The Taiex index shed 2,065.87 points to 19,232.35 after President Trump’s sweeping levies against trade partners.

Despite the US hitting the country with a 32 per cent tariff last week, Taiwan‘s new president has refused to retaliate.

In a message to his citizens on Sunday, President Lai said he is working to ensure that Trump “clearly understands” his country’s contribution to the US economy.

“As long as our response strategies are appropriate, and the public and private sectors join forces, we can reduce impacts. Please do not panic,” he said.

Not a single company listed on the FTSE 100 has seen its share price increase this morning.

About three-quarters of all the profits made by Footsie companies comes from abroad and so their fortunes are closely tied to the health of the global economy.

Shares in Melrose Industries, the aerospace engineer, fell 7.7 per cent; IAG, the British Airways owner, was down 7.5 per cent; and Shell retreated 7.2 per cent.

The index as a whole has shed another 362.26 points, or 4.5 per cent, this morning to sit at 7,692.72 — its lowest level since March 2024.

• David Wighton: Will there be a surge in business returning to the UK?

Oil prices have fallen to the lowest level in four years on fears that demand will plummet as tariff chaos hits the global economy.

Brent crude, the global benchmark price, was down 3.5 per cent at $63.29 in morning trading, the lowest level since April 2021 and down by 16 per cent since President Trump announced the tariffs on April 2.

The sell-off has been compounded by Thursday’s surprise decision by the Opec+ alliance of big oil-producing nations to boost their output by more than had been expected, despite the tariffs.

Analysts at Goldman Sachs today cut their oil price forecasts for the second time since the tariffs were announced. They now expect Brent to be $62 a barrel by December, down $4 on Friday’s forecast, which was itself down $5 on the pre-tariff outlook.

More than $6 trillion has been wiped off the value of US stocks since President Trump’s tariffs announcement, but one asset class that has been booming is government bonds.

Investors are dumping equities and parking their money in sovereign debt, an asset class which benefits from market volatility, recession fears, and anticipation of interest rate cuts in the world’s largest economies.

The yield, which moves inversely to the price of a bond, on ten-year US treasuries — a benchmark for government borrowing cost — has fallen from a peak of 4.8 per cent in January to 3.9 per cent.

In the UK, the equivalent gilt yield is down from 4.9 per cent to 4.4 per cent. The gilts rally provide a sliver of good news for the chancellor Rachel Reeves whose narrow headroom against her fiscal targets is largely dictated by movements in the bond markets.

Hang Seng Index closed down 13 per cent today

PETER PARKS/AFP

The Hong Kong Stock Exchange has closed more than 13 per cent down today — its worst day in almost 30 years.

The Hang Seng Index closed down 13.22 per cent after decreasing by 3,021.51 points to 19,828.30 — its heftiest drop since 1997 during the Asian financial crisis. The SSE Composite Index shed 7.34 per cent, or 245.43 points, to 3,096.58.

In 1997 the financial turmoil caused weak currencies, devalued asset prices and a rise in debt in several east and southeast Asian countries.

Madrid will push the EU to approve aid for industries hit by US tariffs at a meeting of finance ministers today, according to the Spanish economy minister.

Spain is one of the few economies to offer up a concrete solution to help weather the impact of global levies, offering its companies a financial package of loans and direct aid worth €14.1 billion.

European Union countries will likely approve countermeasures on up to $28 billion of US imports. The bloc faces 25 per cent import tariffs on steel, aluminium and cars, and “reciprocal” tariffs of 20 per cent from Wednesday for almost all other goods.

The prime minister will be “honest” about the impact of President Trump’s tariffs on the UK economy, a cabinet minister has said.

Speaking to the BBC, Heidi Alexander, the transport secretary, was asked to react to the news about falling stock markets in Asia and across Europe.

“We’re clear that, actually, a constantly escalating trade war where tariffs are ratcheted up is bad for global demand,” she said.

“It’s bad for prices, which means it’s bad for British consumers and so, obviously, when the prime minister has discussions internationally with allies, he will be honest about both what is in the best interests of the British people.”

• UK economy faces ‘material hit’ from Trump’s tariffs

Bill Ackman is the chief executive of the hedge fund Pershing Square Capital Management

RICHARD BRIAN/REUTERS

President Trump has launched a “global economic war against the whole world” that will usher in an “economic nuclear winter”, said a high-profile Wall Street financier and Trump supporter.

Bill Ackman, chief executive of the hedge fund Pershing Square Capital Management, said in a post on X that Trump’s tariffs were a “self-induced” blow to the American and global economy.

Ackman, a vocal supporter of Trump during the election, said: “By placing massive and disproportionate tariffs on our friends and our enemies alike and thereby launching a global economic war against the whole world at once, we are in the process of destroying confidence in our country as a trading partner, as a place to do business, and as a market to invest capital.”

Last week, the president announced a baseline 10 per cent tariff on all US goods imports and steep import charges on key trading allies. The effective tariff on Chinese goods is now about 60 per cent after Trump’s measures.

Trillions of dollars were wiped off the value of US stocks last week, with Wall Street’s S&P 500 index posting its worst week since the start of the Covid-19 pandemic.

Germany’s Dax index slid by as much as 10 per cent this morning, while France’s Cac 40 decreased by about 6 per cent. The Stoxx 600 index, which tracks the average performance of all European stocks, slid by 6 per cent as well. All three indexes also fell sharply at the end of last week.

Among the biggest fallers in Europe were companies that rely heavily on trade with America to generate profits. The German-listed shares of the plane manufacturer and Dax constituent Airbus tumbled by nearly 11 per cent, while the French luxury fashion giant LVMH shed more than 5 per cent.

European government bond yields fell as traders priced in a greater chance of central banks cutting interest rates to cushion the blow from Trump’s tariffs. The yield on the benchmark ten-year German bond dropped to 2.499 per cent, while the rate on the UK equivalent dipped to 4.414 per cent.

The pound has strengthened against the dollar to $1.2928 after falling sharply on Friday from about $1.31. However, the currency was weaker against the euro with £1 worth €1.17.

In relatively good news for government borrowing costs, the flight into the safety of bonds has driven down the yield on the benchmark ten-year gilt to 4.4 per cent. The yield was 4.9 per cent in January.

Germany’s Dax stock index has plunged by nearly 10 per cent at the start of trade today. This follows a fall of 5 per cent on Friday.

Germany was hit with a 20 per cent tariff rate last week as part of a blanket levy imposed on the European Union by President Trump.

Berlin operates a trade surplus with the US led by the export of cars like Audi and Mercedes-Benz, as well as pharmaceuticals.

By Martin Strydom, Business News Editor

The global stock market sell-off has continued after President Trump showed no sign of backing down on his tariff plans, stoking recession fears.

The FTSE 100 opened 2.5 per cent lower and within five minutes was down 5.56 per cent, or 450 points, at 7,605.97. The more UK-focused FTSE 250 dropped 4.9 per cent.

Trump indicated he was not worried about losses that have already wiped out trillions of dollars in value from equity markets around the world.

• Read in full: Stock market sell-off deepens as Trump remains defiant

Today’s trouble in the Asian markets happened on the first day of trading since President Trump’s tariff announcement.

Markets in China, Hong Kong and Taiwan were closed on Friday for a public holiday. Both China and Taiwan were hit with tariffs above 30 per cent imposed by the US president last week.

China imposed a retaliatory tariff of 34 per cent on US goods but Taiwan offered zero tariffs in response and said it did not plan to change its investment plans in the US.

The Hang Seng Index in Hong Kong is down almost 13 per cent and the SSE Composite Index is down by more than 8 per cent. The Taiex in Taiwan fell by almost 10 per cent.

China and Taiwan produce a number of popular electronics used in the US — although the tariffs do not apply to semiconductors.

After five minutes of trading, the FTSE 100 is now down 4.86 per cent, or 369 points, at 7,685.88.

London’s FTSE 100 has opened down 2.5 per cent this morning after dropping nearly 5 per cent on Friday.

President Trump has responded to the stock market troubles since his tariff announcement by saying “sometimes you have to take medicine”.

The US president was speaking to reporters aboard Air Force One on Sunday evening before the fall of markets in Asia this morning.

“I don’t want anything to go down, but sometimes you have to take medicine to fix something,” Trump said. “What’s going to happen to the markets, I can’t tell you. But our country is much stronger.”

On Saturday Trump wrote on his Truth Social platform: “HANG TOUGH, it won’t be easy, but the end result will be historic.”