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Stock markets were plunged into chaos after Donald Trump threatened to double tariffs on imports of steel and aluminium from Canada.
The US President’s escalating trade war sparked volatility across Wall Street, as America’s S&P 500 fell by as much as 1.5pc before rebounding later in the day.
Markets whipsawed after a string of surprise tariff announcements from both the US and Canada, as investors responded to Ontario’s decision to backtrack on a surcharge on power sales to America.
This came after Mr Trump vowed to impose 50pc tariffs on Canadian metals from Wednesday, with the White House later abandoning the plans just hours before they were due to be implemented.
The erratic trade announcements led to the “fear index” of market volatility hitting highs not seen since last summer’s recession scare in the US.
Global investor panic led to the UK’s FTSE 100 falling by another 1.2pc, losing 4.2pc since the start of last week. The dollar also fell to its lowest level since Mr Trump’s election victory in November.
Mr Trump’s latest tariffs threat marked an escalation in the tit-for-tat spat with Canada, traditionally one of America’s closest allies.
The US President called Ontario’s proposed electricity surcharge an “abusive threat”.
Posting on his Truth Social website, Mr Trump said: “I have instructed my Secretary of Commerce to add an ADDITIONAL 25pc Tariff, to 50pc, on all STEEL and ALUMINUM COMING INTO THE UNITED STATES FROM CANADA, ONE OF THE HIGHEST TARIFFING NATIONS ANYWHERE IN THE WORLD.”
The President added that Ottawa must reduce “outrageous” border taxes on American dairy products and said the extension of expensive US military support to its northern neighbour “cannot continue”.
“The only thing that makes sense is for Canada to become our cherished Fifty First State,” Mr Trump said, as he reiterated calls to absorb the country into the US.
“This would make all Tariffs, and everything else, totally disappear.”
Mark Carney, Canada’s incoming Prime Minister, said the country would not back down until it is shown “respect” by the US.
Mr Carney, the former Bank of England governor, said: “President Trump’s latest tariffs are an attack on Canadian workers, families, and businesses. My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted.
“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”
The latest bout of market turbulence has come amid mounting fears that Mr Trump’s policies risk dragging the US and the rest of the world into a global recession.
The White House played down fears of an economic downturn, arguing the President is reforming the economy.
When asked about the market chaos on Tuesday, Karoline Leavitt, the White House press secretary said: “When it comes to the stock market, the numbers ... are a snapshot of a moment in time.
“We are in a period of economic transition ... from the mess created under Joe Biden”.
Ms Leavitt also explained how America’s relationship with Canada is shifting: “They are a neighbour. They are a partner. They have always been an ally. Perhaps they are becoming a competitor now.”
Separately, Mr Trump also made a show of support for Elon Musk’s Tesla by purchasing a vehicle from the billionaire’s electric car company.
Mr Trump wrote on social media: “Elon Musk is ‘putting it on the line’ in order to help our Nation, and he is doing a FANTASTIC JOB!
“But the Radical Left Lunatics, as they often do, are trying to illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ‘baby,’ in order to attack and do harm to Elon, and everything he stands for.”
Tesla shares are down 42pc since the start of the year.
Meanwhile, JP Morgan upgraded its forecasts for British economic growth amid predictions that the UK will dodge the worst of Mr Trump’s trade war.
Allan Monks, an economist at the bank, said: “Recent rhetoric from the US administration has hinted at a potential exemption for the UK with the two countries apparently working on a trade agreement.
“That remains to be seen, and in any case, there is still likely to be an indirect adverse impact via the EU. But it does suggest a smaller tariff drag in the UK.”
Read the latest updates below.
09:31 PM GMT
That’s all for today
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09:22 PM GMT
Trump hails success of tariffs
Donald Trump has said that hundreds of billions of dollars is being invested in the US as a result of his presidency.
Mr Trump said: “The tariffs are having a tremendously positive influence.” He said they may rise above 25pc. “The higher it goes the more likely it is they’re going to build” in the United States.
He said that companies that were planning factories elsewhere are now building in the US.
09:20 PM GMT
Trump tells business leaders that Tesla could be boosted from controversy
Donald Trump has told a Business Roundtable event that Tesla could ultimately be boosted from the opposition from “agitators”.
Elon Musk “shouldn’t have to suffer because he wants to help,” the president said.
Mr Trump said he was trying to save $1 trillion dollars through the Doge initiative run by Mr Musk.
09:14 PM GMT
Trump to meet business chiefs amid stock market chaos
Donald Trump will meet the bosses of America’s biggest companies this evening, including many whose market value has dropped in recent days as recession fears soured investor sentiment.
The US president is expected to speak with around 100 CEOs at a regular meeting of the Business Roundtable in Washington, an influential group of chief executives leading major companies, which include Apple, JPMorgan Chase and Walmart. Mr Trump met with some technology company executives at the White House on Monday.
Walmart chief Doug McMillon will attend the meeting, the company said. Also planning to attend are JPMorgan’s Jamie Dimon, Citigroup’s Jane Fraser and Goldman Sachs’s David Solomon, according to sources.
A reception and dinner will follow the meeting, one of the sources said.
09:01 PM GMT
US has ‘window cracked open’ for deal with Canada
A fresh deal on trade between the US and Canada now looks possible, a Wall Street analyst has said.
Art Hogan, of B. Riley Wealth Management, said: “The volatility is nothing new to us over the course of the last three weeks.
“The difference today is, for the first time in three weeks, it appears as though we might be getting a little bit of good news. It appears as though there might be a window cracked open in the negotiations with Canada on tariffs,” he said.
He added: “Certainly the longer this uncertainty persists, the more investors are willing to take money off the table and de-risk their portfolios.”
08:27 PM GMT
White House confirms 50pc tariff on Canadian metals is cancelled
The White House has confirmed that the 50pc tariff planned for tomorrow on some Canadian metals has been cancelled.
Instead, a previously planned 25pc tariff will still be enacted.
“A 25 percent tariff on steel and aluminium with no exceptions or exemptions will go into effect for Canada and all of our other trading partners at midnight, March 12,” the White House said.
The British government has said it will not impose retaliatory trade tariffs as a result.
While the European Union plans to hit back against the 25pc US tariffs on imports of the metals, the a UK official said Britain would continue to engage with the US in an attempt to secure an exemption.
Prime Minister Keir Starmer’s official spokesman said on Monday that the UK and the US had a strong economic relationship which was “based on fair and balanced, reciprocal trade.”
08:19 PM GMT
Trump advisor say 50pc tariff won’t be imposed tomorrow
Donald Trump’s trade adviser Peter Navarro has reportedly said that the US president will not impose his 50pc tariff on Canadian metals tomorrow.
Bloomberg correspondent Josh Wingrove wrote on X: “President Trump will NOT impose 50pc tariffs on Canadian steel and aluminium tomorrow, Peter Navarro tells CNBC. Navarro credits [US Commerce secretary] Lutnick for negotiating a deal with [Ontario premier Doug] Ford.”
Mr Trump himself told reporters: “I’m looking at that [cancelling the planned tariff hike] ... I’ll let you know about it.”
08:10 PM GMT
Wall Street ends lower on turbulent day
Wall Street ended lower after shifting from a small gain to 10pc below its record.
The chaotic trading followed the latest escalation in President Donald Trump’s trade war.
The S&P 500 fell 0.8pc, after falling as much as 1.5pc. The Dow Jones Industrial Average fell 1.1pc. The Nasdaq composite slipped 0.2pc.
Gains for Tesla and other influential stocks muted the losses.
08:08 PM GMT
Trump says US ‘going to boom’
Donald Trump has said that the US economy will boom rather than hit a recession.
He told reporters: “I think this country is going to boom, just so you know.”
“I can do it the easy way or the hard way. The hard way to do it is exactly what I’m doing but the results are going to be 20 times greater.
“And remember Trump is always right.”
07:35 PM GMT
Nasdaq higher as stocks buffeted by tariffs
On Wall Street, the Nasdaq is up this evening, while the S&P 500 has reversed most of its earlier declines during a volatile session.
The S&P 500 index dropped as low as 5,528.41 points in trading, falling more than 10pc during the session from its record closing high of 6,144.15 on Feb 19. The 10pc decline, commonly known as a market correction, was reached after Donald Trump said he would double tariffs on all imported Canadian steel and aluminium products.
The latest tariff salvo added to investor unease that Trump’s trade policies, which included tariffs against Canada, Mexico and China, could trigger an economic slowdown or cause a recession.
“That creates just angst and nervousness in the market, so you’re going to continue to get the ‘shoot first, ask questions later’ type of reaction, which is exactly what you’re getting,” said Ken Polcari, chief market strategist at SlateStone Wealth in Jupiter, Florida.
07:30 PM GMT
Trump says he will label violence against Tesla dealers domestic terrorism
Donald Trump said on Tuesday he will label violence against Tesla dealerships domestic terrorism as he appeared with Tesla chief Elon Musk to show support amid recent “Tesla Takedown” protests and the slump in the company’s stock price.
07:26 PM GMT
Trump says will ‘probably’ reconsider Canada tariff hike for metals
Donald Trump has signalled that he will “probably” reconsider a decision to double planned steel and aluminium tariffs on imports from Canada, hours after announcing the sharp hike.
Mr Trump’s step up to 50pc tariffs on Canadian steel and aluminium imports came after its province of Ontario imposed an electricity surcharge on three US states - but Ontario has suspended that decision after talks with Washington.
07:17 PM GMT
Trump non-committal over future of tariff hike on Canadian metals
Donald Trump has signalled that he could go either way on the implementation of 50pc tariffs on some Canadian metals.
“I’ll let you know” if the tariffs are going into effect, he has now said.
He had earlier announced they would start tomorrow.
07:12 PM GMT
Trump says US ‘had to do’ tariff hikes
Donald Trump said this evening that he “had to do this”, referring to his decision to hike tariffs on US imports, and that markets are going to swing up and down over time.
He made the comments at the White House to reporters, saying the policies were needed in order to get American jobs back and factories open.
He said that he is looking at reducing tariffs on Canada now.
07:11 PM GMT
Musk says Tesla to double US vehicle output in next two years
Elon Musk has pledged to double Tesla’s US car output in the next two years, Reuters has reported.
07:06 PM GMT
Trump buys Tesla in show of support for Musk
Donald Trump is buying a Tesla in a sign of support to his most powerful adviser.
The Republican president announced the purchase as “a show of confidence and support for Elon Musk, a truly great American”.
Earlier, Mr Trump’s press secretary Karoline Leavitt told reporters that the vehicle was on its way to the White House. She said it was a “very exciting moment” and Trump would pay the “full market price”.
Mr Trump wrote on social media: “Elon Musk is ‘putting it on the line’ in order to help our Nation, and he is doing a FANTASTIC JOB!
“But the Radical Left Lunatics, as they often do, are trying to illegally and collusively boycott Tesla, one of the World’s great automakers, and Elon’s ‘baby,’ in order to attack and do harm to Elon, and everything he stands for.”
Tesla shares are down 42pc since the start of the year.
06:51 PM GMT
Canada suspends tax on US after Trump doubles metal tariffs
Ontario premier Doug Ford has suspended a 25pc tax on electricity exports to the US after discussions with Washington.
Mr Ford shared on X what he called a joint statement with US Commerce secretary
Howard Lutnick: “Today, United States Secretary of Commerce @howardlutnick and Premier of Ontario Doug Ford had a productive conversation about the economic relationship between the United States and Canada.
“Secretary Lutnick agreed to officially meet with Premier Ford in Washington on Thursday, March 13 alongside the United States Trade Representative to discuss a renewed USMCA [United States-Mexico-Canada Agreement]ahead of the April 2 reciprocal tariff deadline. In response, Ontario agreed to suspend its 25 per cent surcharge on exports of electricity to Michigan, New York and Minnesota.”
06:39 PM GMT
Wall Street on verge of a bear market, warns analyst
Wall Street is gripped by fear and within days a full-blown bear market could take effect, an analyst has warned.
Bear markets occur when major stock indexes fall by 20pc or more.
Adam Sarhan, founder of 50 Park Investments, told Bloomberg: “We are in a situation where the pendulum has shifted and fear has taken over. A lot of this has to do with the ‘Trump trade’ being unwound, but also concerns about growth going forward, and also the R-word, which is recession.”
He added: “The bears are in control right now and every time the market tries to bounce we see another violent leg down.
“If this continues, fast forward a few more days, we are looking at a complete change in environment from a bull market to a bear market.”
06:11 PM GMT
Trump’s ‘Liz Truss moment’ not yet hitting bonds
Donald Trump’s “Liz Truss moment” is so far hitting stocks rather bonds - but US government debt could still come under pressure, an analyst has warned.
Kathleen Brooks, research director at XTB, said: “President Trump’s economic policies have been compared to Liz Truss’s in recent days. However, while the shock and awe approach to economic policy is similar, the impact is different.
“Trump’s policies are hitting stocks hard and weighing on domestic equity market valuations, in contrast Liz Truss’s policies decimated the UK bond market.
“Treasuries are rising on the back of President Trump’s economic policies and yields are falling. The market is looking through the risk of a US recession exacerbating the huge budget deficit, for now.
“However, if economic data does start to deteriorate sharply, then we could see Treasuries also come under pressure.”
06:03 PM GMT
White House suggests change of status for Canada
Karoline Leavitt, Mr Trump’s press secretary, was asked if the US president still thinks of Canada as a “close ally”.
She replied: “They are a neighbour. They are a partner. They have always been an ally. Perhaps they are becoming a competitor now.”
06:01 PM GMT
JP Morgan raises forecast for UK in boost for Reeves
JP Morgan has upgraded its forecasts for the British economy, in a rare moment of good news for the Chancellor as Rachel Reeves prepares her Spring Statement.
The UK might dodge the worst of Donald Trump’s trade tariffs, said Allan Monks, economist at the investment bank, and looks set to benefit from Germany’s borrowing and spending bonanza.
“Recent rhetoric from the US administration has hinted at a potential exemption for the UK with the two countries apparently working on a trade agreement. That remains to be seen, and in any case there is still likely to be an indirect adverse impact via the EU. But it does suggest a smaller tariff drag in the UK,” said Mr Monks.
Britain itself has “limited fiscal capacity with which to raise defence spending, where announced changes have been either small, fully funded or part of a looser medium term ambition,” he said, anticipating Ms Reeves will have to tighten the purse strings a little later this month to meet her borrowing rules.
But the UK should still get “a positive growth spillover” from more spending in the eurozone, as Friedrich Merz, the incoming Chancellor of Germany, plans €500bn of investment including infrastructure spending as well as more borrowing for defence, and Ursula von der Leyen, president of the European Commission, set out a scheme for an €800bn rearmament programme.
As a result JP Morgan expects the UK to grow by 1pc this year and the same again in 2026, up from previous forecasts of growth of 0.9pc and 0.8pc respectively.
However it is not all good news. Borrowers will suffer as Mr Monks expects the Bank of England to stop cutting interest rates when it gets to 3.5pc next year, not 3.25pc as previously anticipated.
05:55 PM GMT
White House promises tax cuts and to boost consumer confidence
The president wants to put more money in the pockets of Americans, Karoline Leavitt, Mr Trump’s press secretary, has said.
She claimed that tariffs, tax cuts, deregulation and “drill baby drill” would increase confidence in the economy.
05:53 PM GMT
FTSE 100 hits seven-week low as markets rocked by Trump
Global stock markets have felt another day of turmoil with the FTSE 100 falling further today amid Donald Trump’s trade war.
The blue-chip index fell 1.2pc, to close at 8,495.99, hitting the lowest level since mid-January.
Sentiment was knocked by an ongoing sell-off on Wall Street.
New York’s S&P 500 had fallen 1.1pc, while Dow Jones dived 1.5pc by the time European markets closed.
It was also a weak picture for equity markets in Europe. Germany’s Dax declined 1.3pc, and France’s Cac 40 closed 1.3pc lower.
05:49 PM GMT
Trump and Carney yet to speak
The White House has said that Donald Trump and Canadian prime minister-designate Mark Carney have not yet spoken.
Karoline Leavitt, Mr Trump’s press secretary, said that the cost of living is higher in Canada and that there would be benefits from it becoming the 51st state.
05:48 PM GMT
White House claims that ‘tariffs are a tax cut’
The White House press secretary, Karoline Leavitt, has claimed that “tariffs are a tax cut on the American people”.
Economists view tariffs as taxes that raise prices for consumers at home.
05:46 PM GMT
White House defends Doge amid backlash
Karoline Leavitt, the White House press secretary, defended Doge’s work that is “investigating the fraudulent spending” in the US government.
She said that 77pc of the American people support Doge’s work.
05:43 PM GMT
White House dodges question on Wall Street sell-off
The White House press secretary Karoline Leavitt dodged a question about the falling stock market, saying that the president is “unwavering” in his support for manufacturing
When pressed with a follow-up question, she said that the president “will look out for” both Wall Street and the wider economy.
05:41 PM GMT
S&P 500 falls into correction after Trump’s fresh tariffs on Canada
The S&P 500 index has now fallen more than 10pc from its record closing peak after Donald Trump on Tuesday announced fresh tariffs on Canada, adding to investor unease that his trade policies could trigger an economic slowdown.
The benchmark index dropped over 10pc during the session from its record closing high of 6,144.15 touched on Feb 19. If the index closes 10pc or more below this level, it would confirm a official correction based on a widely used definition.
The S&P 500 extended Monday’s sell-off that wiped out a staggering $4 trillion from the index’s peak just last month.
05:40 PM GMT
White House rejects notion of low business confidence
The White House press secretary has rejected the idea that business confidence is disappearing.
She said: “There are lots of reasons to be confident”, pointing to examples such as Apple’s major investment in the US. She claimed that Wall Street and CEOs “should bet on this president”.
05:36 PM GMT
White House will unleash ‘grave consequences’ on Canada if it cuts off electricity
There would be “grave consequences imposed on Canada” if they think about cutting off electricity, Donald Trump’s press secretary has said.
Karoline Leavitt said that Mr Trump is determined that the US should rely on domestic energy. However, there are discussions between the US and Canada on electricity, she said.
05:33 PM GMT
Trump has duty to respond to Canadian ‘threat’, says White House
New tariffs on Canadian metals will be applied from tomorrow, the White House has confirmed.
Karoline Leavitt, the White House press secretary, said that Donald Trump had an “obligation and responsibility” to take action after Ontario threatened to cut off supplies.
She emphasised her belief that Canada is “ripping off” the US with protection for Canadian agriculture.
05:31 PM GMT
Nasdaq plunges as White House press conference continues
The US stock market is seemingly reacting negatively to the current White House press conference.
The Nasdaq is currently down 1.3pc at 17,253 from 17,340 at 5pm.
05:28 PM GMT
Carney says Canadian tariffs to stay until ‘Americans show us respect’
The incoming prime minister of Canada has said that his country’s tariffs on the US will stay in place until “Americans show us respect”.
Mark Carney wrote on X: “President Trump’s latest tariffs are an attack on Canadian workers, families, and businesses. My government will ensure our response has maximum impact in the US and minimal impact here in Canada, while supporting the workers impacted.
“My government will keep our tariffs on until the Americans show us respect and make credible, reliable commitments to free and fair trade.”
05:26 PM GMT
White House blames Biden for leaving economic ‘mess’
Asked about the current turbulence on the stock market, Karoline Leavitt, the White House press secretary, attacked Joe Biden.
She said: “When it comes to the stock market, the numbers ... are a snapshot of a moment in time.”
“We are in a period of economic transition ... from the mess created under Joe Biden”.
She claimed that Trump inherited a “disaster” but that we should look to Donald Trump’s first-term record, when stock prices rose.
05:21 PM GMT
‘Globalist era’ ending under Trump, says White House
Karoline Leavitt, the White House press secretary, has said that Donald Trump will stop Americans being “ripped off” by international trade.
The “globalist era” is coming to an end, she said.
05:20 PM GMT
White House takes credit for January data
The White House has taken credit for January jobs data, suggesting that the manufacturing jobs have grown in response to Donald Trump.
Donald Trump became president two-thirds of the way through the month.
05:18 PM GMT
Business leaders ‘encouraged’ by Trump, claims White House
Business leaders are “encouraged” by Donald Trump’s “pro-growth economic agenda”, Karoline Leavitt, the White House press secretary, has claimed.
It comes a day Wall Street continued to fall in respond to Mr Trump’s trade war.
05:03 PM GMT
White House press conference due to start shortly
Karoline Leavitt, the White House press secretary, is expected to open a White House press conference shortly.
Stay tuned to find out how she addresses the market turbulence caused by Donald Trump’s trade war.
04:57 PM GMT
I won’t back down, says Ontario premier
The premier of Ontario, who has imposed a 25pc tax on electricity exports to the United States, has said he will not back down until Donald Trump scrapped his tariffs on Canadian imports.
Doug Ford, reiterating a threat he made on Monday, also said he would not hesitate to cut the supplies if need be. Ontario exports power to 1.5m homes in New York state, Minnesota and Michigan.
He said: “President Trump’s tariffs are causing chaos. Markets are tanking. He needs to drop his tariffs and come to the table to negotiate a fair trade deal. Until he does, we won’t back down.”
04:50 PM GMT
Global stocks extend sell-off without clarity on tariffs
After falling sharply on Monday, shares are losing ground again on Tuesday, though at a slower pace.
On Monday the S&P 500 suffered its biggest one-day drop this year, while the Nasdaq saw its biggest single-day percentage drop since September 2022. This was in reaction to President Trump’s weekend Fox News interview, in which he declined to rule out a recession resulting from his trade policies, and talked about a “period of transition”.
Adding to concerns about tariffs, Tuesday’s data showed US small-business confidence dropped for a third month a row in February, wiping away much of the gains notched in the aftermath of Trump’s November election victory.
Along with the confidence slump, Phil Blancato, chief market strategist at Osaic Wealth in New York, pointed to guidance from Delta Airlines and retailer Kohl’s for a softening of consumer spending ahead.
“You see all these headlines suggesting a slowing of the US economy so you’re not getting the classic dead cat bounce you’d want after a day like yesterday,” said Mr Blancato.
“You’re not seeing a lot of bottom feeders come in just yet ... There’s still a lot of uncertainty in a lot of areas and it’s leading to a lack of institutional buying power.”
While investors will be hoping for some clarity on tariffs by early April, Mr Blancato noted that they are also anxiously awaiting Wednesday’s US consumer price index reading for February for information on inflation conditions.
A high reading would add to last month’s hotter-than-expected data, which included the biggest monthly price gain since August 2023.
The Dow Jones is down 1.4pc, the S&P 500 down 0.9pc and the Nasdaq down 0.4pc. A gauge of global stocks, known as the MSCI World Index, is down 0.9pc.
04:39 PM GMT
Wall Street ‘fear index’ surges
The so-called Wall Street “fear gauge” surged today by 1.1pc as investors continued to be spooked by Donald Trump’s trade war.
The gauge, officially called the CBOE Volatility Index, has risen by 62pc this quarter so far. It is on track to be the biggest rise since the first quarter of 2020, when the Covid pandemic disrupted global economies.
Gold, seen as a safe haven in riskier times, rose 1.1pc today to $2,916.69 an ounce. It is up nearly 34pc this year.
04:27 PM GMT
US dollar hits one-week high against Canadian currency
The US dollar rose to a one-week high against the Canadian dollar this afternoon after Donald Trump hit Canada with more tariffs.
Mr Trump doubled his planned tariff on all steel and aluminium products imported from Canada to 50pc, in response to Ontario applying a 25pc tax on electricity sent to the US.
The US dollar rose to as high as 1.4521 Canadian dollars, its highest level since March 4.
But the pound and euro both rose against the dollar. Sterling jumped 0.54pc to $1.2945, while the euro rose 0.78pc to $1.0924.
Juan Perez, director of trading at Monex USA, said: “The tariffs and the back and forth and the lack of clarity and lack of guidance and lack of achievable goals behind all of this, that’s starting to become the focus of markets and that’s a very negative thing.
“Ultimately it brings the US dollar down ... because if you are going to bring recessionary pressures then you increase the likelihood that the officials at the Fed are going to continue with interest rate cuts and those bets have already started to go up in the market.”
04:20 PM GMT
Trump says US should not import energy
Donald Trump has said that the US should not import energy, after a tax was imposed on some Canadian electricity exports.
He wrote on his Truth Social platform: “Why would our Country allow another Country to supply us with electricity, even for a small area? Who made these decisions, and why?”
04:18 PM GMT
Canadians in US will have to register under Trump crackdown
Canadians who visit the United States for more than 30 days will soon have to register under a crackdown by Donald Trump.
The move will hit an estimated million Canadian “snowbirds” - retired people who flock to the US during the winter in search of better weather.
The change comes from a little-noticed executive order signed by Donald Trump in January called the “Protecting the American People Against Invasion” order. Rosanna Berardi, an immigration lawyer, said: “This one went under the radar.
“At first we were like, ‘All right, not a big deal,’ and then at the very bottom of the order said one sentence that’s very concerning, ‘Canadians who have entered by land and are in the United States for 30 days or more [must register].”
It is understood that the new rules come into place on April 11. Canadian broadcaster CTV reported that the change will take effect on April 11 and the US government is expected to publish a public notice with more details tomorrow.
03:59 PM GMT
Trump yet to sign order for Canadian metal tariffs
Donald Trump is yet to sign the formal paperwork to lift tariffs on Canadian metals, according to a CNBC reporter.
Megan Cassella, the broadcaster’s Washington DC correspondent, said that she has been told by an official that the signing is “in the works”.
03:55 PM GMT
US factories hit by cost hikes amid Trump tariffs
US factories are have been hit by higher metal costs as manufacturers struggle to adapt to Donald Trump’s plans for tariffs.
Bloomberg reported that the US prices for aluminium, steel and copper have been moving higher for weeks as manufacturers race to build up stocks before tariffs are imposed.
The result is that US prices for the metals have decoupled from prices manufacturers in other major economies are paying - with steel prices now 40pc more than Europe. Bloomberg calculated that US manufacturers are paying 23pc more than Europeans for aluminium and 10pc more for copper.
Dan Markham, president of Markham Metals, told Bloomberg: “Customers are concerned, and they’re all wondering how the costs are going to affect their end products.”
03:46 PM GMT
Trump inherited a strong jobs market, new figures show
US job openings rose at the start of the year, another sign the job market was solid when President Donald Trump returned to the White House on Jan 20.
American employers posted 7.7m vacancies in January, the US Labor Department reported this afternoon, up from 7.5m. The outlook for the labour market is murky as Trump wages a trade war with foreign countries, purges federal workers and threatens to deport millions of immigrants.
Redundancies fell slightly in January, and the number of Americans quitting their jobs rose.
Federal government agencies posted 135,000 jobs, down from 138,000 in December. The fallout from purges of federal workers by billionaire Elon Musk’s Department of Government Efficiency is not expected to show up in labour market data at least until the February numbers come out.
“These January data included only the earliest days of Dodge-inspired layoffs of Federal workers,” Carol Weinberg and Mary Chen of High Frequency Economics wrote in a commentary. “There is no evidence of Federal Government layoffs in this report. That does not mean that layoffs in size in Federal workers will not be a big feature of the February report, scheduled for release on April 1.”
03:42 PM GMT
US tariffs ‘a self-inflicted wound’, says ex-US Treasury secretary
Larry Summers, the former US Treasury secretary, has warned that the US now faces a 50pc chance of a recession this year.
He wrote on X: “We’ve got a real uncertainty problem. It’s going to be hard to fix.
“We’re looking at a slowdown relative to what was forecast, almost for sure, and a serious, near 50pc prospect of recession.”
Meanwhile, in an interview with Bloomberg TV, he said that the damage to US competitiveness from tariffs and other Trump administration policies “have led to sharp reductions in spending on behalf of both consumers and on the part of businesses - and even more sharp reductions in intended future spending.”
On X, he said that Mr Trump’s tariff threats on Canada would be “a self-inflicted wound to the US economy that we cannot afford, at a moment when recession risks are rising.”
03:36 PM GMT
S&P 500 plunges amid Trump tariff plans
The S&P 500 has dropped more than 7pc since Donald Trump as his administration immediately pursued a tariff trade war.
I am heading off for the day now and I will leave you with this chart comparing the performance of Wall Street’s benchmark stock index in his first and second terms.
Alex Singleton will keep you up to date, with the President due to speak later after a meeting with Washington business leaders.
03:25 PM GMT
Wall Street bosses must tell Trump tariffs ‘are a disaster’, says Canadian province chief
Wall Street bosses need to “get a backbone” and tell Donald Trump his tariff policies are causing chaos, the head of Canada’s largest province has said.
Doug Ford, the the premier of Ontario, called for talks with the US and warned that assembly plants in Michigan would shut down if the American administration’s trade war continues.
The US president has announced he will double metal tariffs on Canada from tomorrow and threatened levies on its car industry from April 2.
Mr Ford said Canada will not back down to Mr Trump’s “unprovoked attack” which has sent stock markets tumbling around the world.
Wall Street bosses are due to meet the US president in the White House later today.
He told MSNBC: “I’m not sure why he continues to attack his closest friends and allies.
“We need the American people to speak up. We need those CEOs to actually get a backbone and stand in front of him and tell him it’s going to be a disaster. It’s mass chaos right now.”
03:12 PM GMT
Government borrowing costs steady as Trump ramps up tariff war
The cost of government borrowing edged higher after Donald Trump doubled metal tariffs on Canada unexpectedly.
The yield on 10-year US Treasury bonds - a benchmark for sovereign debt costs - rose slightly to 4.23pc, which was a smaller increase than those seen on European markets.
03:07 PM GMT
Trump ‘saps’ market confidence with Canada tariffs blow
Donald Trump has “sapped market confidence” by announcing he will double metal tariffs on Canada, analysts have warned.
Kathleen Brooks, research director at XTB, said: “Hopes for a broad-based market recovery on Tuesday have been dashed.
“US markets had a mixed open, the S&P 500 and the Dow Jones faltered when markets opened, while the Nasdaq initially rallied, led by some tech stocks including Tesla, Netflix and Meta.
“However, news that President Trump has slapped a further 25pc tariff on steel and aluminium imports from Canada has sapped market confidence.”
She added: “The tit-for-tat tariff policy that was started by Donald Trump, is bad news for equity market bulls.
“Back in November, the focus was on the positive impact from Trump’s economic policies, however, now they are reality his policies are negative for growth, at least in the short to medium term.
“Trump’s erratic and reactionary trade policy is eroding faith in US exceptionalism and fueling recession fears.”
02:52 PM GMT
Stock market sell-off resumes as Trump announces tariffs
The global sell-off in stock markets has resumed after Donald Trump announced he would double metal tariffs on Canada.
The FTSE 100 in London and the Cac 40 in Paris dropped 1.3pc while the Dax in Frankfurt plunged 1.3pc after the US president’s unexpected social media post announcing fresh levies from tomorrow.
Markets had slowed down the pace of the sell-off suffered on Monday, when indexes fell heavily around the world over concerns the American economy is at risk of recession.
Gerard Lyons, chief economic strategist at Netwealth said: “When Trump was elected it was clear that his economic policies contained the good, the bad and the uncertain.
“The markets initially focused on the good - in terms of his tax and regulatory changes for the US economy.
“Now the focus is on the bad - namely tariffs. The uncertainty around the execution of these adds to the uncertainty.
“Tariffs can have a triple whammy, adding to worries about inflation, growth and denting confidence.”
02:44 PM GMT
Trump threatens to ‘shut down’ Canada’s car industry
Donald Trump said he would impose tariffs which would “permanently shut down” Canada’s car making industry.
In a lengthy post on his Truth Social platform, the US president said he would “substantially increase” levies on cars coming into the US.
In a test for incoming prime minister Mark Carney, Mr Trump suggested the only way Canada could avoid his tariffs would be to become the 51st state of the US.
He said: “This would make all tariffs, and everything else, totally disappear.
“Canadians’ taxes will be very substantially reduced, they will be more secure, militarily and otherwise, than ever before, there would no longer be a northern border problem, and the greatest and most powerful nation in the world will be bigger, better and stronger than ever.”
02:34 PM GMT
US stocks plunge as Trump ramps up tariff war
Donald Trump’s increased levies on Canadian steel and aluminium has wiped out this morning’s recovery on Wall Street.
The Nasdaq Composite tumbled 0.7pc after the US president announced the tariffs, while the S&P 500 slumped 0.4pc.
Dow Jones has ticked down 0.3pc taking its dive to 1.1pc for the day.
Energy, materials and industrials shares have born the brunt of selling.
02:26 PM GMT
Trump doubles metal tariffs on Canada in deepening trade war
Donald Trump said he will double metal tariffs against Canada and threatened to impose levies on its car industry as relations between the North American nations soured.
The US president announced he would impose 50pc tariffs on all steel and aluminium coming into the US from Canada.
He said the new levy would come into force from tomorrow and was in retaliation for Ontario’s decision to place a 25pc tariff on electricity coming into the US.
In a post on his Truth Social platform, he wrote: “Also, Canada must immediately drop their Anti-American Farmer Tariff of 250pc to 390pc on various US dairy products, which has long been considered outrageous.
“I will shortly be declaring a National Emergency on Electricity within the threatened area.
“This will allow the US to quickly do what has to be done to alleviate this abusive threat from Canada.
“If other egregious, long time Tariffs are not likewise dropped by Canada, I will substantially increase, on April 2nd, the tariffs on cars coming into the US which will, essentially, permanently shut down the automobile manufacturing business in Canada.”
02:11 PM GMT
VW braces for ‘political uncertainty and increasing trade restrictions’
The boss of Volkswagen warned the German car maker faces challenges in the year ahead from Donald Trump’s tariffs.
Chief executive Oliver Blume said he hoped the company would be able to secure a “fair compromise” on tariffs levied on Mexico and Canada given it employs tens of thousands of people in the US.
Mr Trump last week hit all imports from Canada and Mexico with tariffs but then granted an exemption to most car imports after an outcry from the industry.
Mr Blume said VW faced challenges arising “from an environment characterised by political uncertainty, increasing trade restrictions and geopolitical tensions”.
He said: “The US automotive industry has very strong, deep integration in Canada in particular, but also in Mexico.
“We’re counting on the strong investment footprint we have in the USA, including future plans.”
VW profits dropped by more than 30pc last year to €12.4bn (£10.5bn) amid the stuttering shift to electric vehicles, weak demand in Europe and fierce competition from local rivals in China.
01:49 PM GMT
US stocks mixed amid fears of slowdown
Wall Street’s main indexes lacked direction at the start of trading amid worries of a slowdown in the world’s largest economy.
The Dow Jones Industrial Average fell 0.5pc to 41,712.11 after the opening bell.
The S&P 500 was flat at 5,613.94 while the Nasdaq Composite rose 0.7pc to 17,582.25.
01:22 PM GMT
Trump’s flip-flopping on tariffs will push up inflation, warns top central bank
Donald Trump’s trade war is slowing the economy and pushing up inflation, top central bankers have warned.
The US President is not yet two months into his second term in the White House but the Bank for International Settlements, known as the central bank for central banks, said uncertainty around major policies including tariffs is harming the world economy.
“For long-term investment, for business investment and for hiring, policy uncertainty in particular would be a dampener on activity,” said Hyun Song Shin, head of the monetary and economic department at BIS, noting Government spending around the world is another unknown.
“When you are investing for the longer term, having a clear sight of where the economy will be would be very important. Policy uncertainty in particular is going to be giving companies second thoughts before they commit to actions that have long-term consequences.”
So far Mr Trump’s policies include threats of tariffs, but also short-term reversals, announcing extra taxes on goods coming from Mexico and Canada, introducing them then suspending them once more, in an unpredictable series of interventions which form part of his negotiating strategy - moves which make it especially hard for businesses to know where they should source products or invest.
“Tariffs are particularly unhelpful because they can be seen as a supply shock, it makes prices stickier coming down, as well as to dampen real activity,” said Mr Shin.
“Tariffs that are wrapped in uncertainty are going to be doubly unhelpful.”
It comes after Goldman Sachs slashed its forecasts for US economic growth and JP Morgan warned there is a 40pc chance Mr Trump will plunge the world into a global recession.
01:09 PM GMT
Trump putting American exceptionalism ‘under threat’
Donald Trump’s global trade war and his attitude towards Ukraine have put the notion of the US’s international superiority under threat, senior economists have warned.
Mohamed El-Erian, the president of Queens’ College, Cambridge, said investors were starting to question the notion of US exceptionalism over doubts about the transparency of the American government and its adherence to the rule of law.
It comes amid a sharp sell-off on Wall Street which saw the Nasdaq suffer its worst day since 2022 on Monday, while the benchmark S&P 500 has given up all its gains since Mr Trump’s election.
The US president’s administration has used tariffs as a punishment and threat against trading partners and abruptly withdrew military aid to Ukraine last week.
Tariffs would usually push up the value of the dollar but the US currency has slumped against its international peers, dropping 3pc against the pound since mid-January, amid concerns that a US recession would force the Federal Reserve to cut interest rates.
Mr El-Erian told Bloomberg Radio: “One of the US’s edges is predictability and the rule of law.
“The more these two things are questioned, the more that people are going to start questioning US exceptionalism.”
12:47 PM GMT
FTSE 100 falls amid Trump trade war sell-off
The FTSE 100 fell as travel and leisure stocks were wrapped up in the global sell-off.
The UK’s flagship stock index dropped by 0.5pc and was on track for a sixth straight session of declines, as most major European indexes fell into the red.
Traders remained cautious amidst lingering uncertainties around US tariff policy and the outlook for global economic growth.
“What is being questioned in the market is US exceptionalism,” Aneeka Gupta of Wisdom Tree UK told Bloomberg.
“When Trump came back into the White House, the focus was on the positive impact of his policies but now the market is really drilling down into the negatives.”
British Airways owner IAG fell as much as 6.4pc after fellow airlines group Delta halved its first-quarter profit forecast citing weaker domestic demands.
Delta boss Ed Bastian told CNBC that concerns over safety “somewhat exacerbated the impact on us” after its regional jet collided mid-air with an Army helicopter over Washington DC, as well as a Delta plane crashing on landing in Toronto last month.
Despite the dip, RBC Capital deemed IAG undervalued compared with its rivals, citing tailwinds from headroom on seat availability between London and North Atlantic, as well as the recovery of Aer Lingus.
Holiday Inn owner IHG dropped as much as 3.8pc, while the overall travel and leisure sector fell 2.3pc.
Elsewhere, investors tentatively returned to conventionally safer heavyweights such as defence companies BAE Systems and Rolls-Royce.
Persimmon rose as much as 5.5pc after the UK housebuilder reported above expectations profits, raised housebuilding targets and mooted an expected uplift from the UK’s planning bill today.
Ami Galla of Citi said: “We believe the group’s positive 2024 performance, healthy current trading and supportive outlook should improve investor sentiment on the medium term earnings recovery prospects.”
11:53 AM GMT
Market sugar rush has become ‘nasty hangover’
Goldman Sachs has just cut its forecast for US economic growth this year and one of its analysts has come out with this revealing quote about Wall Street.
The investment bank projected the American economy would expand by 1.7pc this year, down from its previous estimate of 2.4pc expansion, as Donald Trump’s tariff plans raised fears of a US downturn.
Benny Adler, head of ECM trading at Goldman Sachs, said: “The market’s post-election sugar high has turned into a bit of a nasty hangover as the policy realities of Trump 2.0 begin to become clear.”
11:25 AM GMT
‘If Trump can survive, he’ll win through’
Stock markets have been “adjusting” to where they should be, Telegraph readers have said after the recent sell-off of US assets.
Some have suggested the US is “is morbidly debt obese” and faces “serious consequences” over the President’s tariffs and attitude towards Ukraine.
Here is a selection of views from the comments section below and you can join the debate here:
11:06 AM GMT
Trump to meet Wall Street bosses after market rout
Donald Trump will meet executives at the White House today as his tariff policies sent US stock markets plummeting.
The US president will talk with Washington-based bosses a day after the Nasdaq suffered its worst losses since 2022.
The business round-table will include bosses of some of Wall Street’s banking giants, according to Bloomberg News.
10:55 AM GMT
Trump urged to speed up tax cuts amid slowdown fears
Donald Trump has been urged to speed up the introduction of tax cuts to boost the US economy amid the threat from his tariff war.
The US president has vowed to cut America’s corporation tax rate from 21pc to 15pc for companies that make their products in the US, which would be far lower than the 25pc rate in Britain.
It is part of a package of measures designed to push companies to relocate operations to the US, where they would also be able to escape new tariffs on various imports.
Steve Moore, an informal economic adviser to Trump, urged the president to push for a tax cuts bill to be signed by Memorial Day in late May, which is faster than the July timetable that has been mooted.
“The economy needs a pick-me-up,” he told Bloomberg News. “Tariffs are not a pick-me-up, but tax reform is.”
10:31 AM GMT
Wall Street on track to edge up after rout
US stock indexes inched up in premarket trading following this year’s biggest one-day drop for Wall Street’s main indexes.
Megacap stocks recovered from Monday’s sharp declines, which saw electric car maker Tesla plummet 15.4pc, chip giant Nvidia fall 5.1pc and Meta drop 4.4pc.
Nvidia added 1.6pc in premarket trading, while Meta and Amazon edged up 0.7pc and 0.4pc, respectively. Tesla added 4.7pc.
Monday’s stock market sell-off came after Donald Trump warned the US economy faces a “period of transition” as he enforces global tariffs against imports to the US.
The sell-off wiped out $4 trillion (£3.1 trillion) from the S&P 500’s peak last month.
Ahead of the opening bell, the Dow Jones Industrial Average rose 0.3pc, the S&P 500 gained 0.4pc and the Nasdaq 100 was up 0.5pc.
10:11 AM GMT
I’ll buy a Tesla to support ‘punished’ Musk, says Trump
Donald Trump has vowed to buy a new Tesla car in support of Elon Musk after a plunge in the company’s share price.
The US president accused “radical Left lunatics” of “trying to illegally and collusively boycott” the business after the stock fell 15pc in one of its worst days on record.
Amid a backlash against Mr Musk, who has emerged as one of Mr Trump’s staunchest allies in the past year, Tesla’s shares have now more than halved in value since a peak in December.
09:49 AM GMT
Investors ‘questioning value’ of US stocks
Investors are questioning the lofty valuations of the US stock market, analysts have said after the dramatic slump on Wall Street that started the week.
The Nasdaq plunged 4pc on its worst day since 2022 while the S&P 500 fell 2.7pc to leave it down 7pc since inauguration day.
Michael Brown of Pepperstone said: “Only twice in the first year of a presidential term (2009 & 2001) has the index notched a worst performance at this stage.”
Lindsay James, investment strategist at Quilter, said: “The main losers on markets yesterday were technology companies, with Nvidia dropping more than 5pc, whilst consumer discretionary stocks also fell victim to a weakening outlook, pulled down by Tesla which fell 15pc, continuing its momentous decline, having now given back all of its post-election gains.
“Whilst the US market continues to benefit from higher levels of earnings growth, with a relatively closed economy, an enormous domestic market and favourable demographics at a time when other markets face greater challenges from slowing international trade, ageing populations and fiscal constraints, investors are continuing to call into question the valuation of US equities in the face of renewed uncertainty.
“This all comes at a time when Europe may finally be about to get its act together on defence spending and China seeks to capitalise on the recent success of DeepSeek.”
09:29 AM GMT
European shares rebound after sharp sell-off
The stock market sell-off has steadied in Europe after the dramatic fall on Monday when the Nasdaq saw its biggest one-day fall in over two years.
Europe’s broad Stoxx 600 index was flat in early trading, while the Cac 40 in Paris rose 0.6pc and the Dax in Frankfurt gained 0.7pc.
The Asia Pacific-ex Japan shares, which had been down around 1.8pc earlier in the day, were last just 0.5pc lower.
The FTSE 100 was 0.1pc lower.
09:09 AM GMT
US heads for jobs crunch as Trump panic spreads
The American jobs market faces a dramatic slowdown, economists have warned after Donald Trump laid the groundwork for a downturn in the US.
Over the next six months, the world’s largest economy is on track to add close to zero jobs when it reports its monthly employment figures, according to Jefferies.
Stock markets have plunged and the dollar has weakened this week after the US president warned the US faces a “period of transition” as he prepares to ramp up his global tariff plans.
Meanwhile, Elon Musk has begun cutting jobs as his Department for Government Efficiency (Doge) seeks to make sweeping cuts to federal budget.
Mohit Kumar, chief Europe economist at Jefferies, said he did not expect an American recession but downgraded his US growth outlook from 2pc to 1.5pc for this year.
He said unemployment risks rising towards 4.3pc to 4.4pc, while the monthly non-farm payrolls data will drop “close to zero in the next six months”.
The latest non-farm payrolls data showed the American economy added 151,000 jobs in February, which was weaker than the 160,000 expected by analysts.
It also revealed federal government employed 10,000 fewer people as Mr Musk’s cuts begin to take effect.
08:47 AM GMT
Pound rises as Trump tariffs could ease UK inflation
Although Donald Trump’s trade policies present a diplomatic headache for the Prime Minister, it may yet give him a boost from the easing cost of living.
The pound was up 0.3pc against the dollar today to $1.292, pushing it back towards to $1.30 where it stood before the election of the US president.
Sterling has gained more than 5pc since Mr Trump’s inauguration in January, making it cheaper for UK companies to import goods and potentially easing inflation.
At the same time, the weakening dollar has helped send the price of oil lower. Brent crude, the international benchmark, is below $69 a barrel.
Jonathan Raymond of Quilter Cheviot said: “One of the interesting aspects of the recent Trump-inspired moves in financial markets is that sterling is a good bit stronger.
“Coupled with a fall in the oil price, that’s good news on the UK inflation front.”
08:24 AM GMT
European stocks slip over fears of US downturn
European stocks have declined for a fourth day in a row over worries that the US economy will be pushed into a downturn.
The Stoxx 600, which features companies from across the Continent, fell 0.3pc in early trading.
However, the Cac 40 in Paris rose 0.4pc and the Dax in Frankfurt gained 0.1pc amid hopes that Germany’s Green party will agree to a deal by the end of the week that paves the way for a €500bn defence and infrastructure fund.
08:13 AM GMT
Lego boss: Trump tariffs do not keep me awake at night
Lego’s chief executive said Donald Trump’s tariff threats do not keep him “awake at night”, as the world’s largest toymaker posted record results.
“It’s not the first time we see those fluctuations and every time we’ve been able to not overreact,” Niels Christiansen told AFP.
He said the company gaining market share was “way more important than whether we get tariffs or not.”
Lego, the world’s largest toy maker, has today posted record earnings for 2024, as net profit grew 5pc and sales rose 13pc to $10.8bn (£8.4bn).
Mr Christiansen said: “We are relevant and we have exciting passion points for many different consumer groups, and that has worked throughout the world.”
08:05 AM GMT
FTSE 100 slumps at the open
The FTSE 100 dropped at the start of trading amid doubts about the outlook for the global economy.
The UK’s blue-chip stock index fell 0.2pc to 8,581.33 as it was also impacted by the recent weakening of the dollar amid worries about US growth. Many of its companies measure their profits in the US currency.
The midcap FTSE 250 edged up 0.1pc to 19,889.81.
08:01 AM GMT
Tesla wiped out all post-election gains
Tesla has erased all its gains since Donald Trump’s election after a bruising day on Wall Street.
The electric car maker slumped 15.4pc on Monday on its worst day since September 2020, capping off a 54pc decline since its record high in December.
The company has faced a backlash over its boss Elon Musk’s close links to President Trump, as he makes sweeping cuts to federal spending under his Department for Government Efficiency (Doge).
Jim Reid, an analyst at Deutsche Bank, said: “It shows how quickly sentiment can change for such companies.”
Tesla is one of the so-called Magnifient Seven grous of stocks on Wall Street which have powered gains in recent years.
The group, which also includes the likes of Meta and Apple, dropped 8.8pc on Monday, heling send the S&P 500 down 1.4pc.
Mr Reid added: “Current losses for the S&P 500 (down 8.6pc from the peak) have now surpassed the moves last summer, when the index fell 8.5pc from peak-to-trough.
“This now makes it the largest sell-off for the S&P since 2023.”
07:45 AM GMT
Euro jumps as Germany hopeful for deal on defence spending plans
The euro jumped after the leader of Germany’s Greens said she was hopeful that a deal to ramp up defence and infrastructure spending in Europe’s largest economy will be completed this week.
The single currency rose 0.5pc against the dollar to $1.09 as the Green party’s co-head Franziska Brantner indicated she was closer to being able to support plans for a €500bn fund which will rip up its debt rules and fuel growth.
The country’s likely next chancellor Friedrich Merz announced the plans as Europe shifts away from reliance on the US for military support, as the Trump administration pulled aid to Kyiv and pushed for a swift end to the war in Ukraine.
On the bond markets, Germany’s 10-year Bund yields - a benchmark for eurozone government borrowing costs - were up slightly to 2.85pc, having jumped by 44.7 bps last week in their biggest rise since February 1990.
Ms Brantner told Bloomberg TV: “Of course we are ready to negotiate. The situation is dire in Ukraine and we really need Europe to speed up its own defense spending.”
07:21 AM GMT
Yen surges as investors seek safe-havens in market rout
The yen touched a five-month high against the dollar as investors sought out safe havens in the market sell-off.
The yen hit 146.55 per dollar before steadying around 147.24. China’s yuan also rose, ticking 0.2pc higher to 7.2426 per dollar.
The dollar is down more than 7pc from a six-month high it hit in January versus the yen.
Other moves in the foreign exchange market were more muted, and analysts noted that a lot of the shifts in currencies had already happened.
The pound edged 0.2pc higher to $1.29 have slipped against the US currency on Monday. Sterling strengthened by 0.1pc against the yen to 189.81.
Chris Weston of Pepperstone said: “Historically, the dollar outperforms when we get a solid rise in volatility, but when the US economy and US equity market are the central point of concern, this is now limiting the attractiveness of the dollar.”
07:13 AM GMT
Japan stocks close at lowest level in six months
Asian stock markets fell over worries that President Donald Trump’s tariffs will plunge the world’s largest economy into recession, impacting global growth.
However, the sell-off moderated towards the end of the session after steep losses earlier in the day.
Japan’s benchmark Nikkei 225 sank 0.6pc to 36,793.11, its lowest close in six months but up from a more than 2pc loss earlier.
China’s Shanghai Composite index edged 0.1pc higher, to 3,368.41 as the country’s annual national congress prepared to wrap up its annual session with some measures to help boost the slowing economy.
In Hong Kong, the Hang Seng lost 0.6pc to 23,634.20.
Australia’s S&P/ASX 200 lost 0.9pc to 7,890.10. South Korea’s Kospi declined 1.2pc to 2,539.94.
Anderson Alves of ActivTrades said: “Heightened anxiety surrounds both existing and incoming US tariffs, along with retaliatory measures from trading partners, and China’s newly effective tariffs will continue to weigh on equities.”
07:06 AM GMT
Japan battles to secure US tariff exemptions
Japan’s trade minister said he had failed to win assurances from US officials that Tokyo will be exempt from tariffs
Yoji Muto was in Washington for last ditch negotiations over the tariffs on a range of Japanese exports including cars, steel and aluminium, which come into effect on Wednesday.
Mr Muto said that Japan, which contributes to the US economy by heavily investing and creating jobs, “should not be subject to” 25pc tariffs on steel, aluminium and auto exports to America.
His meetings with US Commerce Secretary Howard Lutnick, Trade Representative Jamieson Greer and White House economic advisor Kevin Hassett on Monday came just two days before the steel and aluminium tariffs are due to take effect.
President Donald Trump has also said a possible 25pc tariff on imported foreign cars could take effect in early April.
Mr Muto said the US officials acknowledged Japanese contributions and agreed to continue talks, but did not approve his request for Japan’s exemption from the steep import duties.
“We did not receive a response that Japan will be exempt,” he told reporters. “We must continue to assert our position.”
07:05 AM GMT
Sell-off deepens as Trump panic spreads
The global sell-off in stock markets has deepened over concerns that Donald Trump is happy to push the US into recession.
Asian indexes fell sharply overnight, with Japan’s Nikkei and Taiwan stocks sliding about 3pc at one point, hitting their lowest level since September.
Australia’s benchmark index was 0.9pc lower having touched a seven-month low earlier in the day.
Asian markets followed Wall Street where the S&P 500 fell 2.7pc on Monday, its biggest one-day drop this year.
The Nasdaq plunged 4pc, its biggest single-day percentage drop since September 2022.
Fears of an economic downturn have driven a stock market sell-off that has wiped out $4 trillion from the S&P 500’s peak last month.
Prashant Newnaha, a senior Asia-Pacific rates strategist at TD Securities, said: “Markets have now gotten the memo that the administration is intent on ripping the band-aid off.
“Tariffs and recession may be the medicine to create disinflation and getting that 10-year yield lower. For now it’s a controlled demolition.”
The yield on benchmark US 10-year bonds - a benchmark for government borrowing costs - fell five basis points (bps) in Asian hours on Tuesday after dropping 10 bps in the previous session, the largest daily drop in almost a month.
06:58 AM GMT
Good morning
Thanks for joining me. The panic on stock markets deepened overnight as Asian traders dumped stocks over fears the US economy is at risk of recession.
Japan’s Nikkei 225 plunged as much as 2.8pc following heavy losses on Wall Street, where the Nasdaq suffered its worst day sicne 2022.
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What happened overnight
Asian stocks fell sharply as a market sell-off extended on mounting worries that a wide-ranging trade war could dent US economic growth and lead to a recession.
Investor concerns about the potential economic slowdown were exacerbated after President Donald Trump in a Fox News interview talked about a “period of transition” while declining to predict whether his tariffs would result in a US recession.
Those comments and worries sapped risk sentiment, sending stocks sliding and weighing on the US dollar and Treasury yields.
In Asia, stocks were battered across the board with Japan’s Nikkei and Taiwan stocks hitting their lowest levels since September. Australia’s benchmark index closed 0.8% lower having touched a seven-month low earlier in the day.
On Wall Street, the S&P 500 fell 2.7pc, to 5,614.56 for its lowest closing level since September and its biggest daily percentage decline since December.
The Nasdaq Composite fell 4pc, to 17,468.32, for its lowest close since September also. The Dow Jones Industrial Average fell 2.1pc, to 41,911.71, for its lowest close since Nov 4, the day before Trump’s election as president.
MSCI’s gauge of stocks across the globe fell 2.3pc yesterday, to 832.73, after touching its lowest level since January 13.
In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.216pc from 4.285pc late on Friday.