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Wall Street’s flagship stock market has lost all its gains since the election of Donald Trump in November after the US imposed tariffs on its closest allies and China.
The S&P 500 has wiped $3.4 trillion off company valuations in a 5.6pc drop from its record high last month.
The benchmark stock index has fallen 1.5pc to 5,764.38, which is lower than before the US president was elected on November 5, unravelling the so-called Trump trades which has spurred markets higher.
The Nasdaq see-sawed late on Tuesday, falling by more than 1pc, before paring back some of the losses to close just 0.35pc lower at the end of the day.
It comes amid a global rout in stock markets that has seen Germany and Italy’s main stock indexes drop more than 3pc, with France and Paris falling more than 2pc.
Even the FTSE 100, considered to be more sheltered than other European indexes to the Trump tariff threat, plunged by more than 1pc amid fears US tariffs will trigger a global economic downturn.
On a monumental day for markets, the price of Brent crude oil slipped below $70 over concerns it would lead to a slump in demand just as the Opec+ cartel pledged to ramp up production.
The US imposed 25pc levies on its nearest allies Mexico and Canada overnight, along with an additional 10pc levy on China.
Canada and China announced retaliatory measures while Mexico said it would set out its response on Sunday.
Deutsche Bank warned that the turmoil could even put the dollar at risk of losing its status as a safe haven for global investors, as the US currency fell against the pound and the euro despite the inflationary threat from tariffs.
George Saravelos, global head of FX research at Deutsche Bank, said: “We do not write this lightly. But the speed and scale of global shifts is so rapid that this needs to be acknowledged as a possibility.”
Read the latest updates below.
08:17 PM GMT
Beijing challenges Trump’s tariffs with WTO complaint
Beijing has filed a complaint to the World Trade Organization about the new 20pc tariffs imposed by Donald Trump on Chinese goods exported into the US.
China’s commerce ministry said: “The United States’ unilateral tax measures seriously violate WTO rules and undermine the foundation of China-US economic and trade cooperation.”
It added: “China will, in accordance with WTO rules, firmly safeguard its legitimate rights and interests and defend... the international economic and trade order.”
China’s complaint comes after Mr Trump on Tuesday increased US tariffs on Chinese goods exported into America to rates 20pc, from 10pc beforehand.
The American president has claimed the tariffs were increased in response to China’s failure to block fentanyl from being imported into the US.
07:35 PM GMT
Tariffs on Mexico will push up the price of groceries, retail boss says
The boss of one of America’s largest retailers Target has warned shoppers to expect higher prices as a result of Donald Trump’s tariffs on Mexico, Canada and China.
Brian Cornell said the retailer, which sells a variety of groceries, clothes and electronics, could have to raise its fruit and vegetable prices as soon as this week.
The US president on Tuesday imposed 25pc levies on goods from Mexico and Canada, as well as a further 10pc levy on China.
Speaking to CNBC, Mr Cornell said Target relied on imports of fruit and vegetables from Mexico during the winter months, adding: “Those are categories where we’ll try to protect pricing, but the consumer will likely see price increases over the next couple of days.”
He suggested strawberries and avocados could be among the fruits and vegetables that are particularly affected.
06:18 PM GMT
Trump says US tariffs will rise to counter any retaliatory levies from Canada
Donald Trump has said America’s tariffs on Canada will rise in line with any retaliatory levies announced by Canadian prime minister Justin Trudeau.
In a post on his social media platform Truth Social, Mr Trump said: “Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!”
Mr Trump’s comments come after Justin Trudeau imposed 25pc retaliatory tariffs on billions worth of US imports into Canada.
The US president’s post suggests America’s new tariffs will work to counter any retaliatory taxes on exports by increasing commensurately.
05:47 PM GMT
Trudeau: Trump wants to crash Canada’s economy and annex us
Donald Trump tariffs are aimed at destroying Canada’s economy to make it easier for the US to annex its northern neighbour, Justin Trudeau has said.
The Canadian prime minister said: [Mr Trump] wants to see a collapse of the Canadian economy because that would make it easier to annex us.”
Mr Trump has said the 25pc tariffs he imposed on Canada are a response to the country’s failures to block flows of undocumented migrants and illegal fentanyl into America.
Speaking to reporters on Tuesday, Mr Trudeau hit back in calling the US president’s justification for the levies “completely false.”
The prime minister has maintained that Canada has played little part in the issues with fentanyl and undocumented migrants faced by the US.
Mr Trudeau had also publicly tried to address Mr Trump’s concerns, including by boosting border security and naming a new fentanyl czar.
He added that while Mr Trump is a “smart guy,” the tariffs he has imposed on Canada are a “very dumb thing to do.”
05:02 PM GMT
Ontario will put 25pc tax on electricity sent from Canada to the US
Ontario will place a 25pc export tax on electricity sent to the US in retaliation to Donald Trump’s tariffs, the premier of Canada’s southernmost province has said.
Doug Ford told the Wall Street Journal that he is also ready to halt exports of electricity from Ontario entirely, if Mr Trump moves ahead with additional tariffs in April.
In doing so, Mr Ford said he would order the energy ministry to redirect electricity from Ontario’s nuclear facilities that powers 1.5m homes in Minnesota, Michigan and New York.
The Ontario premier said: “President Trump underestimates the Canadian people.”
Mr Ford also said he is prepared to start stockpiling nickel produced in Ontario’s mines that is usually sent to US. Around 50pc of nickel mined in Ontario is sold to American companies and the US Department of Defence.
He said: “[Mr Trump’s] going to wake up real quickly about our critical minerals.”
04:33 PM GMT
Trudeau: Canada will not back down from a fight
Justin Trudeau has warned Donald Trump that Canadians will not back down from a fight as he vowed to press ahead with retaliatory tariffs on the US.
The Canadian prime minister said: “Canadians will not back down from a fight…There is absolutely no justification or need whatsoever for these tariffs today.”
He made his comments just hours after Mr Trump imposed 25pc levies on goods imported from both Canada and Mexico into the US.
Mr Trudeau, in turn, vowed to impose his own 25pc tariffs on C$30bn (£16bn) worth of US goods imported into Canada, in retaliation to the US levies.
The prime minister, who has been in power since 2015, warned that Canada will consider using alternative non-tariff measures to counter America’s levies, if the US tariffs persist.
03:57 PM GMT
Trump: Companies could avoid tariffs by moving to US
Donald Trump has suggested Canadian and Mexican companies could avoid being hit with tariffs by moving to the US.
In a post on his social media platform Truth Social, Mr Trump said: “If companies move to the United States, there are no tariffs!!!”
The president’s post failed to provide any further information and did not clarify the extent to which companies would have to move in order to avoid levies.
03:27 PM GMT
Oil drops below $70 a barrel
The price of oil dropped to its lowest level since October amid doubts about demand in the face of a potential global trade war.
Brent crude fell as much as 2.6pc to $69.76 a barrel as Donald Trump’s tariffs targeted China, the world’s largest consumer of oil.
It comes as Opec+ pledged this week to ramp up production despite the International Energy Agency forecasting that the world would face a glut of supplies this year.
Analysts at Saxo warned the “overall sentiment remains weak on fears a global trade war may hurt growth and demand”.
03:11 PM GMT
S&P 500 erases post-Trump election gains
The S&P 500 has lost all the gains it had made following the election of Donald Trump in November, wiping out $3.4 trillion from company valuations.
The benchmark stock index on Wall Street has plunged 1.4pc today to cement a 5.6pc drop from its record high last month.
It is now lower than before the US president was elected on November 5, unravelling the so-called Trump trades which has spurred markets higher.
Other Trump trades have also begun to unwind, with the pound now up 4.5pc against the dollar since January as traders bet the Federal Reserve will be forced to cut interest rates at least three times this year to boost the American economy.
Meanwhile, bitcoin was down another 3.9pc today to $82,810.52 having surged to a record high above $106,000 in December.
02:50 PM GMT
Stock market rout deepens across Europe
A quick glance at the markets shows the rout in stocks has deepened amid warnings about the impact on the world economy of Donald Trump’s tariffs.
The FTSE 100 was last down more than 1pc to 8,779.82 with the midcap FTSE 250 dropping 1.7pc to 20,033.53.
In Europe, the Dax in Frankfurt and FTSE MIB in Milan were down more than 3pc while the Cac 40 in Paris and Ibex 35 in Madrid plunged more than 2pc.
02:42 PM GMT
Wall Street slumps as Trump tariffs raise fears for US economy
Stock markets in the US fell at the opening bell amid warnings that Donald Trump’s tariffs could jeopardise the dollar’s status as a global safe haven currency.
The Dow Jones Industrial Average fell 1pc to 42,776.26 while the benchmark S&P 500 dropped 0.9pc to 5,798.07.
The tech-heavy Nasdaq Composite declined by 0.9pc to 18,185.47.
02:26 PM GMT
Progress on fentanyl can end tariffs says US Commerce Secretary
The US Commerce Secretary said tariffs against China, Canada and Mexico could be removed if the countries could show progress on stopping the flow of fentanyl.
Howard Lutnick admitted prices could rise in the aftermath of tariffs imposed overnight.
“There may well be short-term price movements, but in the long-term, it’s going to be completely different,” Mr Lutnick told CNBC.
He added the US would reset its trade policy on April 2.
02:11 PM GMT
Companies devise ‘Plan B’ to avoid Trump tariffs
Chocolate maker Lindt & Spruengli was one of several European companies that outlined plans to adapt to the threat from US tariffs.
The Swiss company, which has several factories in the United States, said it may shift the supply chain to these plants towards Europe and reduce supply coming from Canada to avoid the impact of import taxes.
Chief executive Adalbert Lechner said: “The volumes that we source currently for Canada can all be shifted to Europe.
“So far, we have a Plan B to avoid these tariffs in Canada.”
It comes after German tyre maker Continental said it was “monitoring” the situation on tariffs and plans to “optimise” its supply chain, which includes plants in Mexico and Canada.
Meanwhile, Cristiano Fini, president of Italian farmers lobby CIA, said possible tariffs on Europe could cause “billions of dollars of damage” to the Italian food sector, hitting producers of items from Parma ham to Prosecco sparkling wine.
He said: “Those exports to the United States are worth more than €2.4bn, a wealth for Europe as well.”
01:50 PM GMT
Mexico to announce retaliatory tariffs on Sunday
Mexico’s president said she would announce how it will retaliate to Donald Trump’s tariffs on Sunday.
Claudia Sheinbaum said there was no justification for the 25pc levies on Mexican imports to the American economy, which are expected to push the country into recession.
01:40 PM GMT
Trump could destroy dollar’s safe haven status, Deutsche Bank warns
The dollar is at risk of losing its status as a safe haven for global investors, one of Europe’s biggest banks has warned as Donald Trump presses ahead with tariffs against China and his nearest allies.
Deutsche Bank said several developments at the start of the year indicated the weakening appeal of the US currency, which declined against both the pound and the euro today despite tariffs threatening to stoke inflation in the world’s largest economy.
George Saravelos, global head of FX research at Deutsche Bank, said: “We do not write this lightly. But the speed and scale of global shifts is so rapid that this needs to be acknowledged as a possibility.”
The German lender said there was a “weakening correlation” between the dollar and risk assets, and also pointed to the outperformance of both highly volatile and less volatile currencies.
Mr Saravelos said: “Even more crucially, well-established measures of policy uncertainty are now rising more in the US than the rest of the world.
“This is reflective of the broader-based policy disruption and unpredictability from the administration, most notably trade policy and DOGE spending cuts.”
The dollar was higher against the Mexican peso and the Canadian loonie as Deutsche Bank predicted both of America’s nearest trading allies would be plunged into recession by the 25pc tariffs that came into force overnight.
However, traders are betting that the Federal Reserve will cut interest rates at least three times this year amid predictions that tariffs will deal a $150bn blow to US growth during their first year.
01:19 PM GMT
US Treasury Secretary insists prices will not rise as China absorbs tariffs
US Treasury Secretary Scott Bessent said he believes Chinese manufacturers will absorb US tariffs that went into effect overnight.
The former hedge fund boss said the US was in “transition” regarding tariffs on Canada and Mexico.
“China’s business model is export, export, export, and that’s unacceptable,” Mr Bessent told Fox News.
“I am highly confident that the Chinese manufacturers will eat the tariffs, prices won’t go up.
“With Canada and Mexico, I think we’re in the middle of a transition.”
01:03 PM GMT
Trump tariffs to ‘push Mexico into recession’
Mexico will fall into recession later this year as a result of the tariffs imposed by Donald Trump, according to economists.
The country’s economy will shrink by 1pc, said Capital Economics, as it has “no fiscal space to support the economy”, unlike China and Canada.
Mexico’s goods exports to the US are equivalent to around 80pc of total exports and a quarter of its GDP.
Chief emerging markets economist William Jackson said: “Even if some form of deal is reached to lift this tariff, the continued threat of US trade barriers will weigh on confidence and investment and drag on GDP growth.”
12:33 PM GMT
Traders bet on three US rate cuts amid ‘Trumpcession’ fears
Traders are betting that the US Federal Reserve will need to cut interest rates three times this year amid fears tariffs will plunge the American economy into a “Trumpcession”.
Money markets are now pricing in a third rate cut by the Federal Reserve before the end of 2025 after the US imposed 25pc levies on its nearest allies Mexico and Canada, along with an additional 10pc levy on China.
It comes amid concerns that the tariffs will impact global growth.
The Budget Lab at Yale said the average household consumer would suffer a $1,600–$2,000 blow as a result of the measures, which it said had raised the US effective tariff rate to the highest since 1943.
Stephen Innes, managing partner at SPI Asset Management, said Washington had been “left debating whether it’s about to stumble into a self-inflicted ‘Trumpcession’.”
12:09 PM GMT
Wall Street poised to fall as Trump enforces tariffs
US stock investors were jittery in pre-market trading as Donald Trump’s tariffs came into effect overnight.
Lacklustre US stock indexes have flatlined following a sell-off on Monday as investors held their breath ahead of Tariff Tuesday.
The Dow Jones Industrial Average dropped 1.5pc on Monday and the S&P 500 tumbled 1.8pc - its worst day since December.
Mr Trump’s tariffs brought swift retaliation from the trading partners, with Beijing imposing levies on agricultural shipments, and rocked investor confidence in US stocks.
“We are in a new era where the mantra is to protect markets and the US is leading in this,” said Alicia Garcia Herrero, chief Asia-Pacific economist at Natixis.
“China retaliated focusing on Trump’s staunchest voters in the agriculture sector. But that is not going to stop him.”
Traders later be closely watching the US president’s prime-time address to Congress on Tuesday.
“There is still some market doubt as to whether all these tariffs will persist for a prolonged period of time,” said Jim Reid, Deutsche Bank analyst.
11:46 AM GMT
Tariffs to hit US growth, say economists
The American economy will grow at a slower pace amid rising inflation as Donald Trump’s tariff plans take hold, according to economists.
The National Institute of Economic and Social Research (Niesr) estimates US GDP growth could be nearly half a percentage point lower over the next year as a result of the 25pc import tariffs on Canadian and Mexican goods, as well as the 10pc extra tariff on China.
It forecast that inflation may rise by 1pc in the US as a result of the levies. The consumer prices index hit 3pc in January.
Principal economist Ahmet Kaya said:
Policies so far suggest that Trump is not going to stop here, and further tariff increases and broader coverage seem likely.
11:18 AM GMT
Government borrowing costs fall as investors seek safety
Donald Trump’s tariff trade war has helped to send government borrowing costs lower as investors seek safe returns.
The yield on 10-year UK gilts - a bond market benchmark for government borrowing costs - has fallen four basis points to 4.51pc, with sovereign debt costs falling across Europe.
It follows a spike in yields on Monday amid concerns that European governments were about to ramp up defence spending.
However, US government borrowing costs have not improved so far as a result of the tariffs. The 10-year US Treasury yield edged higher to 4.16pc.
10:59 AM GMT
Trump trade war threatens economic stability, says EU
The EU warned on Tuesday that US tariffs on Canada and Mexico threaten transatlantic “economic stability” and risk “disrupting global trade”.
European Commission spokesman Olof Gill urged Washington to reverse course on its trade policy.
He said: “These tariffs threaten deeply integrated supply chains, investment flows, and economic stability across the Atlantic.”
He noted that Mexico and Canada are the European Union’s economic partners through two separate agreements.
In January, the EU announced that it would strengthen its trade relations with Mexico, an upgrade that had been eight years in the making.
“The EU stands firmly against protectionist measures that undermine open and fair trade. We call on the United States to reconsider its approach and work towards a cooperative, rules-based solution that benefits all parties,” he added.
10:39 AM GMT
Defence stocks help FTSE 100 weather tariff storm
While European markets have plunged, the FTSE 100 has suffered a less severe hit from Donald Trump’s tariff trade war.
While markets in Germany, Spain and Italy suffered falls of around 2pc, the UK’s flagship stock index was last down 0.3pc as it was buoyed by tailwinds for defence stocks and some strong financial results.
Quality assurance company Intertek has been the best performing stock on the FTSE 100 with shares soaring as much as 7.7pc to hit their highest level in over three years after its results exceeded analyst expectations.
It launched a £350m share buyback, raised its profitability goal and hiked its dividend after recording a rise in pre-tax profits of 8pc to £547.8m.
Precious metals miner Fresnillo also rose as much as 3.9pc, the most since Feb 14, after posting strong final results which saw a jump in operating profits. It comes after JP Morgan named the stock one of its top picks.
Defence stocks such as Rolls-Royce Holdings and BAE Systems continued to rally after European leaders agreed on Sunday that they needed to spend more on defence. Imperial Brands and British American Tobacco also continued to rise.
Meanwhile British equipment rental company Ashtead dipped after profit estimates fell short in the third quarter following weakness in the US construction sector.
10:17 AM GMT
European stock sell-off deepens
European markets slumped further amid fears of a global trade war.
The Dax in Frankfurt was among the worst hit, dropping by 1.9pc a day after hitting a new record high.
The Cac 40 in Paris was down 1.2pc, with the Ibex 35 in Madrid falling 1.9pc and the FTSE MIB in Milan declining by 2pc.
Donald Trump’s administration pressed ahead with 25pc tariffs on Canadian and Mexican goods overnight, while also imposing an extra 10pc levy on Chinese imports.
It comes a week after the US president floated a 25pc tariff on cars and other goods from the European Union.
Daniela Hathorn, senior market analyst at Capital.com, said: “He hasn’t given too much details, but said that they are going to come. So again, markets are good to be cautious and we’re going to see that cautious turn for a while.”
10:06 AM GMT
EU ‘deeply regrets’ US tariffs on Canada and Mexico
The European Union “deeply regrets” the Trump administration’s decision to impose tariffs on Canada and Mexico, its official spokesman said.
The bloc called on the US to reconsider its approach to tariffs and trade.
09:50 AM GMT
Canadian and Mexican currencies fall as tariffs kick in
The Canadian dollar and the Mexican peso fell to their lowest levels in a month as Donald Trump’s tariffs came into force.
The loonie was a touch weaker at $1.4491 having hit a one-month low of $1.45415 on Monday.
The Mexican peso slid over 0.5pc to 20.821 per dollar, its lowest since February 3 and was last at 20.739.
Vasu Menon of OCBC said: “The decision by Trump to go ahead with tariffs on Mexico and Canada has turned fear into reality.”
Meanwhile, the pound was up 0.2pc against the US currency to $1.273 amid hopes a renewed defence spending push could ignite economic growth.
The euro was also up 0.4pc versus the dollar to $1.053 as European Commission president Ursula von der Leyen announced €150bn of loans for EU countries to invest in defence.
The euro was 0.1pc higher against the pound at €1.21.
09:25 AM GMT
Continental to examine sites in Mexico and Canada amid US tariffs
Tyre maker Continental has said it will analyse its sites in Mexico and Canada and then make a decision on their future as US tariffs on goods from those countries take effect.
The German manufacturer is bracing for a difficult 2025 amid weakening car demand in Europe and rising global trade tensions.
Shares fell as much as 8.9pc in Frankfurt as the company forecasted an adjusted underlying profit margin of 6.5pc to 7.5pc this year, compared with 6.8pc in 2024.
It has factories in Mexico, Canada and the United States producing everything from tyres to automotive components.
The company employs around 38,000 people in the region, its second-most important market after Europe, which accounted for 27pc of total sales in 2023.
09:10 AM GMT
China urged to announce growth measures to counter tariffs
Investors in China are hoping that Beijing will announce a huge economic stimulus package in an effort to counter Donald Trump’s tariff war.
China will hold its key parliamentary meeting, the National People’s Congress, from Wednesday against a backdrop of falling markets in Hong Kong, Singapore, Bangkok, Sydney, Wellington, Taipei, Jakarta, Kuala Lumpur and Seoul.
Manila and Shanghai were the only gainers overnight as US tariffs on Canada, Mexico and China came into effect.
In a press conference, China’s foreign ministry said the country has never succumbed to bullying or coercion, and that “trying to exert extreme pressure on China is a miscalculation and a mistake”.
Stephen Innes of SPI Asset Management said: “The spectre of a full-blown trade war is once again looming, threatening to choke global economic growth just as investors were starting to regain confidence.”
MUFG Bank’s Lloyd Chan said: “In the upcoming National People’s Congress, Chinese policymakers could provide more pro-growth measures including announcing a larger budget deficit target and maintaining a 5pc growth target for this year.”
08:53 AM GMT
Car shares plunge as tariff war escalates
Shares in European car makers plunged amid fears that Donald Trump’s trade war will extend to the Continent.
Vauxhall-maker Stellantis fell 4.4pc, Mercedes-Benz dropped by 3.2pc, BMW declined 4.3pc and Volkawagen was down 2.6pc.
The US tariffs against Canada and Mexico are among the most sweeping of the Trump era, applying to around $1.5 trillion in annual imports.
Chris Weston of Pepperstone said: “Market anxiety levels have been dialed up, and we see traders having to react aggressively and dynamically.
“Either way, volatility in markets is on the rise and we need to be prepared for headlines to break at any moment.”
08:30 AM GMT
Japan trade minister to visit US to seek tariff exemptions
Japan’s trade minister is expected to visit the US as early as March 10 on a mission to secure exemptions from Donald Trump’s tariff war.
Economy, Trade and Industry Minister Yoji Muto will meet US Commerce Secretary Howard Lutnick and US Trade Representative Jamieson Greer, the Asahi newspaper reported.
Mr Muto plans to request exemptions from the additional tariffs on Japanese products such as cars and steel proposed by the US president.
08:25 AM GMT
European stocks plunge amid Trump tariffs and Ukraine war fears
European stock markets sank in early trading amid fears of a global tariff trade war and as the US suspended military aid to Ukraine.
After hitting record highs on Monday, the Dax index in Frankfurt plunged 1.6pc to 22,776.15, while the FTSE 100 in London dropped 0.5pc to 8,824.04.
The Cac 40 in Paris fell by 1.3pc to 8,089.66 a day after it rose above its previous record closing high.
08:16 AM GMT
Oil prices plunge as Trump tariffs put growth at risk
The price of oil has fallen to a near three-month low as Donald Trump’s tariffs risked a global trade war that could stifle economic growth.
Brent crude fell 1pc below $71 a barrel after losing 1.6pc on Monday, while US-produced West Texas Intermediate was below $68.
Oil prices face pressure from a potential slump in global demand if the Trump administration’s tariff policies impact world economies.
The global oil market already faces a surplus this year, according to the International Energy Agency, while the Opec+ cartel said on Monday that it will begin to increase output in April.
Saudi Arabian oil giant Aramco, the world’s sixth-most valuable company, today revealed a 12pc drop in profits last year to $106.3bn (£83.7bn) amid lower energy prices.
Warren Patterson of ING said oil is “under pressure on two fronts” from US tariffs and the new production plans from Opec+.
He said retaliatory tariffs mean “likely further escalation, which will only further cloud the growth and demand outlook”.
08:04 AM GMT
UK markets slump amid global trade war fears
The FTSE 100 fell at the start of trading as Donald Trump’s tariffs on Canada, Mexico and China came into force.
The blue-chip stock index fell 0.6pc to 8,817.23 as Ottawa and Beijing announced retalitatory measures.
The midcap FTSE 250 was down 0.2pc to 20,325.28.
07:49 AM GMT
Government borrowing costs fall as tariffs take effect
Government borrowing costs fell at the start of bond market trading after Donald Trump’s new 25pc tariffs on imports from Mexico and Canada took effect.
Monday saw a sharp rise in longer-term bond yields - a proxy for government borrowing costs - triggered by expectations of a rise in European defence spending.
However, traders snapped up bonds again, which are seen as a safe haven in times of turmoil. Bond prices rise as the yields fall.
Germany’s 10-year bond yield, the eurozone’s benchmark, fell five basis points (bps) to 2.44pc.
The yield on the 30-year bond, which on Monday rose nearly 12 bps, was last down two bps at 2.78pc.
07:32 AM GMT
China tariffs to put US farmers ‘under stress’
China’s tariffs on American agricultural and food products will cause “a great deal of stress among US farmers”, analysts have warned.
Beijing swiftly retaliated against fresh US tariffs, announcing 10pc to 15pc hikes to import levies covering a range of American goods, and placing 25 US companies under export and investment restrictions.
Ole Hansen of Saxo Bank said: “From a pricing perspective, this is happening at a very bad time for U.S. corn prices, which were already under some selling pressure from hedge funds that in the past few months accumulated very large and extended bets on higher prices.
“This will continue to increase China’s dependency on Brazil corn and soybeans while causing a great deal of stress among US farmers who are about to make their spring planting decisions in the coming weeks.”
Ole Houe of Ikon Commodities added: “It is broadly negative for US agricultural markets.
“It is going to have a bearish influence on prices. There are enough corn and soybean supplies in the world for China to make the switch, it is more of an issue for the US - 30pc of US soybeans still go to China.”
07:23 AM GMT
China hits back at Trump tariffs
China retaliated to Donald Trump’s trade war by imposing tariffs as high as 15pc on some US exports.
Stocks recovered somewhat from heavy losses in early Asian trading hours after analysts suggested Beijing’s response averted a full-blown global trade war for now, hitting US agricultural goods but avoiding tech or cars.
Hong Kong’s Hang Seng earlier plunged as much as 2pc but was last flat, while Taiwan’s stock exchange was down 0.7pc having dropped as heavily as 1.7pc.
Billy Leung of Global X ETFs in Sydney said: “China’s hit back isn’t exactly aggressive.
“That’s probably why Chinese stocks are rebounding instead of selling off harder.”
Mexico has not yet responded to Mr Trump’s announcement. Claudia Sheinbaum, the country’s president, said on Monday prior to the confirmation of the tariffs, that the country has back-up plans.
“We have a plan B, C, D,” Ms Sheinbaum said, without giving details of the plans.
07:14 AM GMT
Canada retaliates after Trump confirms 25pc tariffs
Canada has announced that it will impose retaliatory tariffs on the US after Donald Trump confirmed that he would go forward with his planned 25 per cent levies, writes Emily Blumenthal.
In a statement, Canada’s prime minister, Justin Trudeau, called Mr Trump’s tariffs “unjustified” and said Canada would respond with equivalent measures should the US continue with the action.
“Today, after a 30-day pause, the United States administration has decided to proceed with imposing 25 per cent tariffs on Canadian exports and 10 per cent tariffs on Canadian energy. Let me be unequivocally clear – there is no justification for these actions,” the statement said.
07:07 AM GMT
Shares plunge as Trump pledges to enforce tariffs
Global shares sank after Donald Trump pressed ahead with tariffs on his nearest allies Canada and Mexico.
The US president said there was “no room left” for negotiations on the 25pc levies on goods from the two countries, which comes into force today.
China also faces an additional 10pc tariff to add to the 10pc enforced by Mr Trump last month.
Asian markets continued their falls overnight following a bruising Monday.
Japan’s benchmark Nikkei 225 dropped 1.3pc to 37,298.03 and Hong Kong’s Hang Seng was last down 0.3pc to 22,938.52, having earlier plunged by 1.6pc.
It follows heavy falls on Wall Street on Monday after Mr Trump confirmed tariffs were going ahead, with the S&P 500 falling by 1.8pc to 5,849.72.
European shares were also on track to open lower.
07:01 AM GMT
Good morning
Thanks for joining me. Stocks fell in Asia with investors ducking for cover as new US tariffs on Canada, Mexico and China took effect, threatening to escalate global trade tensions.
Japan’s Nikkei dropped as much as 2.6pc and Taiwan’s benchmark lost 0.7pc.
The risk-sensitive Australian dollar slid and crude oil wallowed near 12-week lows, while bitcoin languished around $86,000 after erasing the surge to the cusp of $95,000 that started the week.
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What happened overnight
Asian markets tumbled on Tuesday after Donald Trump heaped tariffs on Chinese imports and warned levies on Mexico and Canada would not be averted.
Japan’s Nikkei and Hong Kong’s Hang Seng saw the biggest drop, tumbling more than 2pc and 1.5pc respectively.
It came after the White House said Mr Trump had signed on Monday an executive order to increase a previously imposed 10pc tariff on China, to 20pc.
The US President also stressed that Canada and Mexico would not avoid being hit with 25pc levies, causing US stocks to fall on Monday.
Canada responded on Tuesday by putting 25pc tariffs against $155 billion worth of American goods.
Beijing also warned on Tuesday that it would take countermeasures against new US tariffs on Chinese imports.
On Wall Street, stocks were down sharply after US President Donald Trump said 25pc tariffs on Canada and Mexico will go into effect on Tuesday and reciprocal tariffs will start April 2.
The Dow Jones Industrial Average fell 1.9pc, to 42,997.96, the S&P 500 fell 2.2pc, to 5,822.95, and the Nasdaq Composite fell 3.1pc, to 18,273.23.
In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.165pc, from 4.229pc late on Friday.