Unlock stock picks and a broker-level newsfeed that powers Wall Street.
In This Article:
Donald Trump has vowed to hit imports of pharmaceuticals with new tariffs in a major setback for one of Britain’s largest export industries.
Speaking in the Oval Office on Monday night, the US President said he would announce the charges on foreign drugs in the “not too distant future”.
It would mark a landmark moment for the industry, which has been exempt from tariffs for decades, following a World Trade Organisation agreement to ensure countries can get affordable access to medicines.
It is also a key export market for nations including the UK and Ireland. Pharmaceuticals is Britain’s second largest industry for exports to the US, after cars.
Mr Trump said: “We don’t make our own drugs, our own pharmaceuticals - we don’t make our own drugs any more.
“The drug companies are in Ireland, in lots of other places [like] China. And all I have to do is impose a tariff. The more, the faster they move here.”
Mr Trump also suggested he was exploring possible tariff exemptions for imported vehicles to give carmakers “a little bit of time” to move manufacturing to the US.
Pharmaceuticals were excluded from the first round of sweeping tariffs announced on Mr Trump’s “liberation day” earlier this month. However, he has hinted they will be subject to industry-specific charges, much like those levied on car and steel imports.
On Monday, he renewed his pledge, saying: “We’re going to be doing that. That’s going to be like we have on cars, you know a 25pc tariff on cars. We have a 25pc tariff on steel and aluminium. And that’s what that category fits right now.”
Last week, the chairman of British drugmaker AstraZeneca said medicines “should be exempted from any kind of tariffs because at the end this is just harming patients, health systems and restricting health equity”.
Around £7.2bn worth of medicines and pharmaceutical products was exported from the UK to the US in the 12 months to November, compared to around £4.5bn imported from the US to the UK.
The US imports around $213bn (£163bn) worth of pharmaceuticals every year and is reliant on countries such as India for supply of low-cost “generic” medicines.
Generics - mass-produced drugs that do not carry a patent - account for around 90pc of all US prescriptions, while India supplies almost half of all US generic medicines. Drug companies have warned that it would be more expensive to produce these medicines in the US, raising the risk of price increases for patients.
Mr Trump has claimed new tariffs will make drugmakers “come rushing back into our country because we are the big market”. He said earlier this month: “The advantages we have over everybody is that we’re the big market.”
The US President has been particularly critical of companies with manufacturing in low-tax jurisdictions including Ireland.
Last month, Mr Trump’s Commerce Secretary Howard Lutnick, said: “We’re gonna try to fix a whole bunch of these tax scams. Ireland is my favourite.”
Ireland’s enterprise minister swiftly rejected the characterisation: “We absolutely have no tax scams in this country.”
The threat of new tariffs risks having ripple effects for some of Britain’s largest listed companies. AstraZeneca makes around 42pc of its sales in the US, according to AJ Bell analysis of Bloomberg data, while GSK makes around 52pc. AstraZeneca has around 22pc of its manufacturing facilities there, while GSK has 26pc.
Mr Trump’s comments on Monday caused Wall Street to plunge briefly into negative territory as traders attempted to parse the financial hit that the move would make. The key stock market index, the S&P 500, is up by 0.9pc.
It came as Scott Bessent, the US treasury secretary, admitted that tariffs at their current level against Chinese imports were not sustainable.
He said that he still had hope for a major trade deal with Beijing, which has labelled the tariffs a “joke”.
“These are not a joke. I mean these are big numbers,” Mr Bessent said. “I think no one thinks they’re sustainable, wants them to remain here, but it’s far from a joke.”
He told Bloomberg Television that trade talks had begun with Vietnam and were due to start with Japan on Wednesday, followed by South Korea next week.
Read the latest updates below.
07:28 PM BST
Signing off...
Thanks for joining us today on this live blog.
You can follow all our latest stories and commentary on the world of business and economics here.
06:58 PM BST
Lesotho gives licence to Musk’s Starlink after being hit by tariffs
Lesotho has granted a licence to Elon Musk’s Starlink to satellite internet services, the country’s communications authority has said.
The licence granted to Starlink Lesotho will be valid for 10 years, Lesotho Communications Authority (LCA) said .
The development comes as Lesotho seeks to engage with the United States on reciprocal trade tariffs after it was hit with a 50pc tariff - the highest levy on Donald Trump’s list of target economies announced earlier this month. The tariff has since been temporarily lowered.
The LCA said the “landmark decision” to grant a licence to Starlink marked “a significant step forward in the country’s digital transformation” and that it underscored “the authority’s unwavering commitment to enabling a competitive, transparent, and forward-looking communications sector that fuels economic growth and fosters innovation”.
In March, Mr Trump described Lesotho as a country “no one has heard of”. Lesotho’s foreign minister, Lejone Mpotjoane, later said the remark was “quite insulting”.
Starlink, whose parent company is SpaceX, submitted its licence application in April 2024 but it faced opposition including from campaigners.
Kananelo Boloetse, an activist based in Lesotho’s capital, Maseru, said: “By proceeding with this decision, the LCA has not only disregarded the valid objections of local stakeholders but has also compromised the integrity and credibility of the regulatory process”.
“Chief among these [objections] was the fact that Starlink Lesotho is 100pc foreign-owned, a factor that should have weighed heavily in a licencing process that ought to safeguard national interests and promote inclusive local participation.”
Starlink operates in many African countries, but has faced licencing obstacles in places such as South Africa and Namibia.
06:16 PM BST
LVMH shares plunge as sector braces for tariff-fuelled slump
The world’s largest luxury goods group has revealed that its sales fell 3pc in the first three months of the year, as shoppers held back on purchases of designer goods in a choppy economic environment.
LVMH’s update sent its US shares down 7.5pc.
The French company behind high-end labels including fashion houses Louis Vuitton and Dior, jewellery brand Bulgari and Hennessy cognac, has had a “difficult start” to the year, said Bernstein analysts.
Europe’s luxury players were counting on wealthy Americans to reignite growth for the sector at the start of this year as the outlook for China, another crucial market, remained bleak.
But with fears of a US recession on the rise after Donald Trump’s recent tariff announcements sent stock markets and the dollar plunging, the sector is bracing for what could be its longest slump in years.
The fashion and leather goods division, home to Louis Vuitton and Dior and accounting for nearly half of group sales and over three quarters of operating profit, posted a 5pc fall in sales, well below expectations for a flat performance.
Sales in the US market fell 3pc in the first quarter, while in the Asia region, excluding Japan, they were down 11pc. Total group sales for the three months to the end of March came to €20.3bn (£17.5bn).
The luxury sector, selling prized items to rich shoppers at high margins, is better positioned than other industries to use its pricing power to shield profits against Mr Trump’s tariffs, which would include a 20pc charge on European fashion and leather goods and 31pc for Swiss-produced watches, if fully applied.
Last week, Mr Trump paused most of his tariffs for 90 days, setting a general 10pc duty rate instead.
06:07 PM BST
US stocks edge up despite uncertainty over tariffs
Wall Street edged slightly higher this afternoon after the White House created exemptions from his tariffs.
The Dow Jones Industrial Average rose about 0.2pc and the S&P 500 gained 0.3pc. The Nasdaq Composite added 0.2pc, boosted by technology shares including Apple, whose stock gained around 2.4pc.
The S&P 500 rallied 5.7pc last week, but was still more than 5pc below where it was before what Trump calls “reciprocal” tariffs were first announced in early April.
05:59 PM BST
UK shares rise as Trump’s tech tariff exemption calms markets
UK shares climbed on Monday in broad-based gains after Donald Trump exempted smartphones and computers from steep Chinese tariffs, offering investors some relief following weeks of market volatility.
The blue-chip FTSE 100 index was up 2.1pc and the mid-cap FTSE 250 index gained 2.5pc.
The White House unveiled the tariff exemptions on Friday covering 20 categories including smartphones and laptops, as well as semiconductor memory chips and flat panel displays, accounting for 23pc of US imports from China.
But Mr Trump on Sunday declared these exemptions temporary and revealed plans to announce new semiconductor tariffs within a week, with smartphone tariffs to follow “soon”.
Persistent uncertainty surrounding tariff policies has disrupted global markets recently, leading to a roughly 8pc drop in the UK’s blue-chip index from its record-closing high.
05:53 PM BST
Trump floats exemptions to car tariffs
Donald Trump is considering exemptions to his tariffs on imported cars and auto parts to give US manufacturers some breathing space while they build new plants.
He told reporters in the Oval Office: “I’m looking at something to help car companies with it.
“They’re switching to parts that were made in Canada, Mexico and other places, and they need a little bit of time, because they’re going to make them here.”
Shares in several US-listed carmakers surged after the comments. General Motors rose 3.7pc, Stellantis added 2.4pc and Ford rose 2.9pc.
05:46 PM BST
Trump says China and Vietnam discussing how to hurt the US
Donald Trump has said that China and Vietnam were meeting to figure out how to harm the United States, but that he did not blame them for such discussions.
The US president told reporters in the Oval Office: “I don’t blame China; I don’t blame Vietnam.
“I see they’re meeting today... that’s a lovely meeting. Meeting like, trying to figure out, ‘how do we screw the United States of America’.”
05:41 PM BST
European shares rise as Trump eases tariffs on electronics from China
European shares closed higher today, after Donald Trump exempted smartphones and computers, bringing some respite after weeks of turmoil.
The pan-European Stoxx 600 ended 2.7pc higher after registering its third consecutive week in the red on Friday.
The top index in Germany rose 2.9pc, while France, Spain, and Britain also registered gains of more than 2pc.
Weeks of back-and-forth over tariffs have rattled global markets, dragging the benchmark Stoxx 600 index down roughly 11pc from its record closing high.
Banks and chip-related companies were among the biggest risers.
Darrell Cronk, president of Wells Fargo Investment Institute, said: “The problem markets are wresting with today, in our view, is the Trump administration has conflicting priorities and difficult time-horizon mismatches between geopolitical ambitions and economic and market outcomes.”
Despite Monday’s gains, the benchmark index sits almost 7pc away from levels seen before Trump’s so-called reciprocal tariffs were announced on April 2.
05:34 PM BST
Trump claims to have ‘solved inflation’
Donald Trump has claimed to have already fixed inflation, despite warnings from economists that tariffs will fuel higher prices.
“We already solved inflation,” Mr Trump told reporters gathered Monday in the Oval Office.
The US president was touting the 2.4pc annual inflation rate seen in the latest data released published today.
05:24 PM BST
Trump vows tariffs on pharma imports
Donald Trump has pledged to impose tariffs on drugs shortly as he steps up his push to move manufacturing to the US.
He told reporters in the Oval Office: “Pharmaceuticals we’re going to do. We don’t make our own drugs, our own pharmaceuticals - we don’t make our own drugs any more. The drug companies are in Ireland, in lots of other places [like] China. And all I have to do is impose a tariff. The more, the faster they move here.
“We’re going to be doing that. That’s going to be like we have on cars, you know a 25pc tariff on cars. We have a 25pc tariff on steel and aluminium. And that’s what that category fits right now.
“I have a timeline - not too distant future.”
05:14 PM BST
‘Stock market is up’, Trump claims
Donald Trump has taken credit for a rising stock market.
He told a press conference in the Oval Office: “The numbers are incredible, actually. Stock market’s up. We’re not letting other countries take advantage of this country like they have for the last 40 years.”
The S&P 50 is up 2.4pc over the past five trading days and down 8.7pc since the start of the year.
04:57 PM BST
Trump market chaos boosts Goldman Sachs
Goldman Sachs’ trading floor has posted its best quarterly performance ever in the first three months of 2025 after successfully capitalising on the volatility in global markets that has followed Donald Trump’s return to the White House.
The investment bank reported a 27pc year-on-year increase in revenues from its stock trading division to record highs of $4.9bn (£3.7bn) in the quarter of 2025, even as all of the major US stock indices have seen their values drop since the start of the year.
Goldman’s bumper trading performance came as David Solomon, the bank’s chief executive, said “the prospect of a recession has increased” as a result of the US president’s decision to impose tariffs on every country in the world.
The bank boss said “growth was slowing down” before Trump put in place his trade policies on 2nd April as he suggested the “uncertainty” surrounding his tariffs would make the situation worse. “The level of uncertainty is up significantly,” Mr Solomon said.
Trump’s tariff announcements drove wild fluctuations in stock markets worldwide that saw some of sharpest drops in major indexes since the start of Covid, when the global economic activity ground to a halt due to lockdowns across the globe.
04:54 PM BST
EU tariffs on US goods suspended until July 14
The EU’s retaliatory tariffs on US goods worth €21.9bn (£18.7bn) will be on hold until July 14, Brussels has said, to give time for negotiations with Washington.
The European Union was hit with a 20pc rate as part of Trump’s sweeping tariffs on April 2, before he suspended the measures for 90 days a week later.
To give breathing room for negotiations, the EU in turn last week halted its countermeasures on previously enacted US tariffs on steel and aluminium, and on the auto sector - which remain in place.
The EU’s pause will “take legal effect” on Tuesday, the European Commission said.
EU trade chief Maros Sefcovic is in Washington today for talks with US counterparts in the hope of an agreement before the 90 days are over.
The EU is still preparing its response to the 20pc levies, it said, although Brussels has made it clear it would prefer to avoid retaliation.
“The EU considers US tariffs unjustified and damaging, risking economic harm to both sides, as well as the global economy,” the Commission said.
04:44 PM BST
Trump will boost stock market, claims White House adviser
Donald Trump’s policies will be “very good” for share prices, a White House economic adviser has claimed, writes Max Head.
Kevin Hassett said that future tax cuts, deregulation and cutting red tape would be “very good for the country and equities market”.
He added: “I don’t see how the long run, a year from now, the policies that we’re looking at are viewed as anything other than a big positive for equity markets.”
This comes amid uncertainty over President Trump’s tariffs policies, which caused Wall Street to plunge last week.
Analysts at Morgan Stanley warned that Mr Trump’s trade war is still likely to exacerbate uncertainty for businesses and consumers.
“The equity market will likely remain in a wide trading range with high volatility until we have more certainty on the depth of the growth slowdown and the timing of a recovery,” they wrote.
04:18 PM BST
Xi calls on China and Vietnam to ‘oppose unilateral bullying’
Xi Jinping, the Chinese president, has said that China and Vietnam should “jointly oppose unilateral bullying”, as he made a state visit to the Southeast Asian nation in the shadow of US tariffs.
“We must strengthen strategic resolve, jointly oppose unilateral bullying, and uphold the stability of the global free trade system as well as industrial and supply chains,” Mr Xi told Vietnam’s top leader, To Lam, according to the Xinhua news agency.
China and Vietnam have reportedly signed 45 cooperation agreements today. According to Xinhua, the the deals cover a wide range of sectors including artificial intelligence, customs inspection and quarantine, and agricultural products trade.
04:10 PM BST
Nvidia bows to Trump as it pledges new factories in US
Nvidia is to build AI supercomputers in the US for the first time as Donald Trump’s trade war upends global supply chains.
The tech giant said that it has commissioned a million square feet of new factories to make the machines.
Together, its US manufacturing of AI chips and supercomputers would “create hundreds of thousands of jobs and drive trillions of dollars in economic security over the coming decades”.
Jensen Huang, chief executive, said: “Adding American manufacturing helps us better meet the incredible and growing demand for AI chips and supercomputers, strengthens our supply chain and boosts our resiliency.”
The White House said: “It’s the Trump Effect in action.”
03:56 PM BST
Stocks soar after Trump exempts tech firms from tariffs
Wall Street jumped on Monday after the US exempted smartphones, laptops and other electronic products import tariffs, writes Julia Amann.
The move spared the sector most of the 145pc tariffs Mr Trump has imposed on China.
Dow Jones was up 1.3pc, while Nasdaq rose 1.9pc and the S&P 500 added 1.7pc.
The exemptions will ease some pressures on the cost of consumer goods, notably on Apple products, which would have become “unsellable” if tariffs went into effect, according to Kim Forrest, chief investment officer at Bokeh Capital Partners.
He said: “It feels as if the Trump administration is responding to consumer pressure... the huge tariffs placed on China might be walked back as well.”
Tech firms were among the biggest risers in the S&P. Dell, which manufactures extensively in China, rose 7pc. Apple is up 3.7pc, while Nvidia rose 1.5pc, after chipmakers were also exempted from the duties.
Wall Street’s “fear gauge”, officially called the Vix, fell from eight-month highs hit last week and is down 17.3pc today.
03:34 PM BST
Bruised dollar struggling to recover from losses
The dollar turned higher this afternoon after a bruising week as investors became increasingly worried about Donald Trump’s erratic implementation of tariffs
It is still down 0.7pc against the pound today, and down 5.43pc this year.
Adam Button, chief currency analyst at ForexLive: “The policy-making is so chaotic that it’s tough to think beyond the next 24 hours in terms of where the policy rates might be or where the economy is headed.
“The uncertainty is now at an intolerable level for most businesses in international trade and the question is how quickly that hits the consumer in the real economy. Right now, the market is taking a dim view on future US growth and that has come through most clearly in the currency market.”
Nick Rees, head of macro research at Monex Europe, said: “Markets right now are trading the uncertainty, and that has not been helped over the weekend by the contradictory stories coming out of the US administration.
“That really skews risks for the time being towards further dollar weakness as markets try to avoid some of this uncertainty by hiding basically anywhere that isn’t in the US.”
The US dollar index, which compares the American currency with a basket of leading rivals, is currently down 0.3pc today, but was down as low as 0.9pc earlier.
03:11 PM BST
Xi signs agreements with Vietnam as Trump disrupts trade
Xi Jinping signed dozens of agreements with leaders in Vietnam at the start of a tour of Southeast Asia as Donald Trump’s tariffs disrupt US economic relations in the region.
The deals included enhancing supply chains and cooperation over railways, although detailed content was not disclosed.
On Saturday Vietnam’s deputy prime minister Bui Thanh Son had said around 40 agreements would be signed. A separate aviation business deal was signed on Sunday.
It comes after Vietnam was hit with 46pc tariffs by the US, although these were suspended for 90 days last week.
03:08 PM BST
Trump’s trade war strengthens case for Scottish independence, claims Swinney
Donald Trump’s trade war strengthens the case for Scottish independence, Scotland’s First Minister has claimed.
John Swinney warned of the economic impact of the policy decisions taken by the Trump administration, saying it would likely cause damage if the Scottish Government fails to take action, but insisted that the “time is right” for Scotland to become an independent country.
He said: “I believe the time is right for that [independence], because it is so important that we have the economic scope and powers to act in the interest of the people of Scotland.”
Scottish Conservative finance spokesman Craig Hoy said: “It defies all logic that John Swinney wants to compound the global economic turbulence that’s currently buffeting Scotland by once again pushing for independence.
“Tearing Scotland out of the UK would be an act of economic self-harm at any time, but doing so now, when the world economy is facing extreme pressure, would be utterly reckless.”
02:36 PM BST
US stocks rise after Trump’s tech reprieve
Stock markets in New York surged at the start of trading as Wall Street was given its first chance to react to Donald Trump’s decision to exempt smartphones and computers from tariffs.
The Dow Jones Industrial Average rose 1.1pc to 40,636.00 while the benchmark S&P 500 gained 1.5pc to 5,442.09.
The tech-heavy Nasdaq Composite climbed 2pc to 17,063.47.
02:25 PM BST
Goldman Sachs profits rise amid Trump tariff war
Goldman Sachs reported a 15pc rise in first-quarter profits as the bank’s traders capitalised on the market volatility caused by Donald Trump’s tariffs, writes Julia Amann.
The bank’s equities revenue jumped 27pc to a record high as investors reworked their portfolios to avoid a hit from duties.
Slowing business under trade barriers reduced Goldman’s investment banking fees 8pc from last quarter. The S&P 500 index has fallen 9pc so far this year, and initial public offerings and mergers and acquisitions were still subdued.
Goldman’s shares have fallen 12pc since the tariffs were unveiled earlier this month, and rivals JP Morgan and Morgan Stanley have experienced similar drops, despite reporting higher profits.
Chief executive David Solomon said: “While we are entering the second quarter with a markedly different operating environment than earlier this year, we remain confident in our ability to continue to support our clients.”
Goldman’s shares have fallen 12pc since the “liberation day” tariffs were unveiled earlier this month.
Rivals JPMorgan and Morgan Stanley have experienced similar drops, despite reporting higher profits. Mr Solomon said these were “times of great uncertainty”.
He said last month the business community “understands what [Trump] is trying to do”, but added it was “always going to want lower tariffs”.
02:04 PM BST
Trump adviser insists US ‘100pc not’ going into recession
One of Donald Trump’s top advisers has insisted the US is “100pc not” going to fall into recession this year despite increasing warnings from Wall Street.
Kevin Hassett, the White House national economic council director, suggested “very strong jobs numbers” indicated that America would avoid a severe downturn this year.
“Everything’s through the roof, anecdotally, with the CEOs I’ve been talking to,” he told Fox Business.
“When I talk anecdotally to the CEOs, I say things like, ‘Well geez is the uncertainty over tariffs looking like it’s going to be a big drag?’ — and they’re saying things like, ‘No, in terms of production, we’re getting as much onshore as we can.’”
It comes amid increasing predictions from Wall Street of a recession, with Morgan Stanley forecasting a likelihood of 60pc and Goldman Sachs a 45pc chance.
Ark Invest chief executive Cathie Wood said she predicts a US recession in the first half of this year.
01:52 PM BST
Telegraph readers: We should not be slaves to the FTSE
Donald Trump was “elected on promises he’s carrying out” and should ignore financial markets, Telegraph readers have said.
Others suggested his approach to foreign policy is “beyond bonkers”.
Here is a selection of views from our comments section below and you can join the debate here:
01:43 PM BST
FTSE 100 higher as tech given tariff exemptions
The FTSE 100 remained higher after Donald Trump exempted many consumer electronics products from tariffs, writes Max Head.
London’s flagship stock index was last up 1.7pc, with 97pc of its members in positive territory, as investor confidence was boosted by the White House’s climbdown on duties against tech stocks.
Interactive Investor analyst Richard Hunter said the jump suggests “some evidence of continued interest in the UK as an investment destination amid the turmoil elsewhere”.
Early gains were felt by companies more closely linked to China, such as Prudential and Standard and Chartered, which rose by 3pc and 3.3pc, respectively. Barclays rose 4.1pc.
The best performer was medical firm Convatec, which gained 5.6pc after it gave shareholders an improved sales outlook following a delayed announcement by the US Medicaid administration agency.
BP rose 4.9pc after it announced a deepwater oil discovery off the US Gulf. Brent oil price increased 1.2pc, after exclusions on some tariffs, and rises in Chinese imports
Sportswear company JD sports gained 3.7pc, despite the company’s chairman warning of price rises and volatile trading caused by US tariff uncertainty. Easyjet, Sainsbury’s and Melrose all saw rises of over 3pc.
The only stocks down on the day were Rentokil, down 1.1pc, Rightmove, down 0.4pc and British American Tobacco down 0.2pc.
01:09 PM BST
Opec cartel cuts forecast for oil demand amid Trump tariff war
The Opec cartel of oil producing nations has cut its forecasts for growth on global oil demand this year as Donald Trump’s trade war hits the world economy.
The group lowered its projections for 2025 and 2026 by about 100,000 barrels a day. It said demand would expand by about 1.3m barrels per day.
Its estimates were still significantly higher than other forecasters, with the US’s government’s Energy Information Administration cutting its expectations for growth in demand by 25pc to 900,000 barrels a day.
The price of Brent crude was last up 1.2pc today towards $67, with US-produced West Texas Intermediate up 1.3pc to morew than $62.
12:23 PM BST
Sony hikes PlayStation prices in response to Trump tariffs
Sony will hike the price of its PlayStation 5 in Britain as the video game industry was hit by Donald Trump’s tariffs.
The electronics giant said it was taking the “tough decision” to raise prices around the world amid the “backdrop of a challenging economic environment, including high inflation and fluctuating exchange rates.”
It said its PS5 Digital Edition would rise to £429.99 in Britain from today, up from £389.99 previously, while in Europe the cost to consumers rose from €449.99, where prices had been since 2022, to €499.99.
Gamers in Australia and New Zealand were also hit by the price rises, with the PS5 Digital Edition rising from 649.95 Australian dollars (A$) to A$749.95.
The price rises were announced official PlayStation blog on Sunday, just two days after the US caused confusion by announcing exemptions for many consumer electronics products, including smartphones and computers.
Mr Trump told reporters on Sunday that he planned tariffs on semiconductors over the next week.
11:48 AM BST
Oil rises after tariff exemptions announced
The price of oil rose as the US watered down elements of Donald Trump’s global trade tariffs.
Brent crude, the international benchmark, gained 1pc to more than $65 a barrel after the US president paused import duties on some consumer electronics.
Oil had declined 13pc since the US president’s “liberation day” tariffs.
US-produced West Texas Intermediate was up 1.1pc to more than $62.
11:13 AM BST
US stocks poised to jump despite Trump’s tariff threat
Wall Street stocks were on track to rise after the White House exempted smartphones and computers from reciprocal tariffs on China.
The US announced the exemptions on Friday, although President Trump said on Sunday that he would announce tariff rates for imported semiconductors later in the week.
US commerce secretary Howard Lutnick said the exempted technology products would face new duties within the next two months.
However, chip stocks have jumped with Nvidia up 2pc and Micron Technology gaining 4.3pc. Apple was up about 5pc.
Michael O’Rourke of JonesTrading said: “Some will certainly interpret a one-to-two-month reprieve as a positive, and there will be strong expectations that the Administration won’t follow through.”
In premarket trading, the Dow Jones Industrial Average was up 0.9pc, the S&P 500 had gained 1.2pc and the Nasdaq 100 was up 1.4pc.
10:52 AM BST
Apple shares on track to surge after smartphones spared tariffs
Apple share were on track to surge at the opening bell in New York after Donald Trump announced he would exempt smartphones and other consumer electronics from his global tariffs.
The tech giant’s shares rose about 5pc in premarket trading after the US Customs and Border Protection excluded 20 product types from the 125pc tariffs on China and 10pc levies on nearly all other countries.
KeyBanc analyst Brandon Nispel said the exemption was “probably the best case scenario” for Apple, although he warned there would likely still be “consumer spending pullback” as the hit from tariffs takes effect.
Apple shares rose 4.21pc on Friday before the details of the tariff exemption emerged.
10:37 AM BST
Tesla champion predicts US recession
One of the most prominent backers of Tesla has predicted the US will fall into recession in the first half of this year as Donald Trump’s tariffs take effect.
Cathie Wood, chief executive of ARK Invest, said America faced “the last leg of a three-year rolling recession” amid the “shock therapy” administered the President.
Ms Wood, who last year forecast that Tesla shares would hit $2,600 in five years, said the US government would be hit with its “first recession in 30 years” as Elon Musk’s federal spending cuts take effect.
However, she predicted “strong growth to begin sometime in the second half”.
She said: “Now that much of the economy has seized up in response to the fear of tariffs, the drop in activity is likely to be more severe than otherwise would have been the case, a clarion call for tax cuts, deregulation, and lower interest rates.”
10:10 AM BST
China and Hong Kong stocks rally
Chinese and Hong Kong stocks rose after the White House exempted smartphones and computers from “reciprocal” US tariffs.
China’s blue-chip CSI300 Index climbed 0.2pc, while the Shanghai Composite Index had gained 0.8pc by the close, after losing 2.9pc and 3.1pc last week, respectively.
Hong Kong’s benchmark Hang Seng Index rose 2.4pc after an 8.5pc loss last week. The Hang Seng Tech Index added 2.3pc.
The Trump administration granted exclusions from steep tariffs on smartphones, computers and other electronics imported largely from China, while indicating these goods will come under separate tariffs, along with semiconductors, that may be imposed within a month.
Before today’s rebound, the CSI 300 Index and Hang Seng Index had lost 3.5pc and 9.9pc, respectively, since April 2 when the US president announced his “liberation day” tariffs.
Goldman Sachs has revised its 12-month targets for MSCI China and the CSI300 index, lowering them to 75 and 4,300, respectively, down from previous estimates of 81 and 4,500, respectively.
Analyst Kinger Lau said: “US-China trade tensions have soared to unprecedented levels, prompting concerns about global recession, and decoupling risks between the two largest economies globally in other strategic cohorts, notably capital markets, technology, and geopolitics.”
09:43 AM BST
Wall Street predicts surge in gold prices
The price of gold is expected to hit $4,000 an ounce next year, according to Wall Street, as investors continue to take cover from Donald Trump’s trade war.
Goldman Sachs analysts forecast that bullion would rally to $3,700 by the end of this year before surging into mid-2026 as the bank predicted there was a 45pc chance that the US will fall into recession.
Meanwhile, UBS suggested gold would hit $3,500 an ounce by December.
Gold, which is considered a safe haven for investors to put their money in times of turmoil, climbed to a fresh record high overnight at more than $3,245 an ounce, having climbed 6.6pc last week.
Goldman Sachs analyst Lina Thomas said: “Recent flows have surprised to the upside, likely reflecting renewed investor demand in hedging against recession risk and declines in risk asset prices.”
09:29 AM BST
Tech stocks boosted by Trump tariff exemptions
A rally in technology stocks helped lift European shares after Donald Trump granted exclusions from China tariffs on smartphones and computers.
The pan-European Stoxx 600 – which includes British companies – was up 2pc after registering its third consecutive week in the red on Friday.
Weeks of back-and-forth over tariffs have rattled global markets, dragging the benchmark index down roughly 12pc from its record closing high.
Shares of chip-related companies Infineon, ASML, and BE Semiconductor were last up between 3.1pc and 4pc.
The European technology stocks rose as much as 3.1pc while banks added as much as 3.6pc.
09:07 AM BST
Dalio warns world on heading for ‘something worse than a recession’
Billionaire hedge fund boss Ray Dalio has said Donald Trump’s tariffs have put the world on course for “something worse than a recession”.
In an interview with NBC, Mr Dalio, who founded the world’s biggest hedge fund Bridgewater Associates in 1975, said the world is currently seeing a “breaking down” of the global order that could be “very, very disruptive” if it “isn’t handled well”.
He said: “If you take tariffs, if you take debt, if you take the rising power challenging existing power, if you take those factors and look at the factors, those changes in the orders, the systems, are very, very disruptive. How that’s handled could produce something that is much worse than a recession.”
Mr Dalio said the “breaking down” of the global monetary system and “profound changes” in the way that America is ruled have now put the world on course for a “very severe” situation, that could be worse than either the 2008 crash or the Nixon shock in 1971.
The New York born billionaire, who previously predicted the 2008 recession, added that the situation the world’s currently facing is “very much like the 1930s”. He added: “Right now we’re at a juncture.”
Mr Dalio said that the worst-case scenario could see a global economic “downturn” paired with political clashes inside America and “international conflict” between countries worldwide.
He said: “To be very specific, the value of money, internal conflict that is not the normal democracy as we know it, and international conflict in a way that is highly disruptive to the world economy and could even be a military conflict just as these breakdowns have occurred before.”
Mr Dalio said Trump’s tariffs risk making the situation worse, as he suggested the US president risks approaching America’s problems in a “chaotic and disruptive way”.
The 75-year-old hedge fund manager said America now has an opportunity to avoid the most “severe” situation, by resolving the issues currently faced in a “practical” and “stable” way.
To do so, Mr Dalio said the US must cut its deficit and work with other countries in an “orderly way” to avoid “great disruptions.” He said: “It can be done in a bipartisan way the way it was done between 1991 and ‘98.”
08:45 AM BST
Stocks surge as Trump’s ‘partial de-escalation’ alleviates Asian exports
Stocks have jumped after the “partial de-escalation” of US tariffs by Donald Trump against smartphones and other consumer electronics.
The FTSE 100 was up 1.8pc after London markets were given their first chance to react to the US president’s climbdown on imposing tariffs on consumer electrical goods including flat-screen televisions along with computers and camera accessories.
The Nikkei 225 in Japan closed 1.2pc higher and the Hang Seng in Hong Kong was up 2.2pc, while indexes in France and Germany were up 2pc.
Paul Ashworth, chief North America economist at Capital Economics, said there were some big winners in Asia from the exemptions, which apply to 20 product types.
He said: “At a stroke, 64pc of US imports from Taiwan are now exempt from the 10pc reciprocal tariff, 44pc from Malaysia, and almost 30pc from both Vietnam and Thailand. 10pc to 12pc of imports from India, Korea and Mexico will also now be exempt.
“The upshot is that the overall effective tariff rate on US imports now stands at 22pc, still up a lot from 2.3pc last year, but down from 27pc [on Thursday].
“The increase in the headline tariff rate on China specifically remains at 145pc, but the effective increase once those exemptions are accounted for is now closer to 106pc.”
He added: “These exemptions will presumably not be the last either, with the success of Apple’s Tim Cook in getting its smartphones exempted likely to boost the lobbying by firms in other sectors.”
08:27 AM BST
European shares jump at the open
European stock markets rose sharply at the open after the United States announced exemptions from sweeping tariffs for smartphones, laptops, semiconductors and other electronic products.
The Dax in Frankfurt and Cac 40 in Paris jumped 1.8pc, tracking gains in Asia and on Wall Street, despite Donald Trump warning that the exemptions could be short-lived.
08:14 AM BST
UK borrowing costs fall after Trump’s electronics climbdown
The cost of government borrowing fell as trading began on bond markets after Donald Trump exempted smartphones from steep tariffs on China in another climbdown from his flagship trade policy.
The yield on 10-year gilts, a benchmark for the cost of servicing the national debt, dropped seven basis points to 4.69pc to start the week.
The US Customs and Border Protection quietly announced the decision to exempt smartphone late on Friday night.
However, the President insisted on Sunday he still plans to announce tariffs on imported semiconductors over the next week.
08:04 AM BST
UK markets jump at the open
The FTSE 100 leapt higher at the start of the week after Donald Trump exempted smartphones and other consumer electronics from his global tariffs.
The UK’s blue-chip stock market rose 1.6pc to 8,088.84 while the mid-cap FTSE 250 gained 1.2pc to 18,738.23.
07:47 AM BST
Xi calls for closer trade ties with Vietnam
Xi Jinping called for stronger ties with Vietnam on trade and supply chains amid disruptions caused by US tariffs.
China’s president has kicked off a three-nation trip to Southeast Asia in the Vietnamese capital of Hanoi.
The visit, planned for weeks, comes as Beijing faces 145pc US duties, while Vietnam is negotiating a reduction from tariffs of 46pc which Mr Trump paused for 90 days last week.
“The two sides should strengthen cooperation in production and supply chains,” Xi said in an article in Nhandan, the newspaper of Vietnam’s Communist Party.
He also urged more trade and stronger ties with Hanoi on artificial intelligence and the green economy.
07:16 AM BST
China exports surge ahead of tariffs
China’s exports jumped as companies rushed to beat increases in US tariffs, Beijing said.
Exports rose 12.4pc in March from a year earlier to $313.9bn (£239.2bn), while imports fell 4.3pc to $211.3bn, leaving a trade surplus of $102.6bn.
China faces tariffs of 145pc on its exports to the US and its trade surplus with the world’s largest economy hit $27.6bn in March as its exports rose 4.5pc.
ING economics said: “Savvy US importers likely saw tariff hikes coming in April onward and frontloaded imports.
“As a result, it’s likely that direct trade between the US and China will crater starting in April.”
06:50 AM BST
JP Morgan warns US recession still likely despite Trump tariff climbdowns
JP Morgan economists warned Donald Trump’s recent scaling back of his tariffs still left the US likely to face a recession.
Bruce Kasman, head of economics at the Wall Street bank, said: “The post-liberation day back-pedalling has led some to breathe a sigh of relief. Not us.
“A 10pc universal tax is still a very large shock and the huge 145pc tax on China is prohibitive.
“You cannot stop trade between the world’s two largest economies and not expect damage everywhere. We maintain our call for a 60pc likelihood of a US/global recession.”
06:44 AM BST
European stocks on track to open higher
European stocks were higher in premarket trading as Donald Trump exempted consumer electronics like laptops and smartphones from US tariffs.
Asian markets had already moved higher after the White House exempted smartphones and computers from “reciprocal” US tariffs.
However, gains were limited as the President warned levies were still likely at some point.
Indeed, Mr Trump on Sunday told reporters tariffs on semiconductors would be announced over the next week and a decision on phones made “soon”.
06:28 AM BST
Dollar falls further over recession fears
The dollar fell for a fifth consecutive day over concerns the US is heading for a recession.
The pound gained 0.2pc to $1.311 while the euro rose 0.1pc to 1.137. The dollar fell 0.3pc to fetch 143.06 yen.
The Bloomberg Dollar Spot Index, which measures the greenback against other major currencies, slipped as much as 0.4pc after tumbling 2.4pc last week.
06:02 AM BST
Race to keep furnaces burning at Scunthorpe
British Steel staff and civil servants will spend Monday attempting to avert the permanent shutdown of Britain’s last primary steelmaking plant.
The company, which was taken over by the government on Saturday, faces a race against time to ensure it has enough raw materials to keep the two blast furnaces at its Scunthorpe plant burning.
Without those materials, such as coking coal and iron ore, the blast furnaces will cool, risking irreparable damage and the end of steelmaking in the Lincolnshire town.
On Sunday, Business Secretary Jonathan Reynolds was unable to guarantee this would not happen, but said taking over the plant had given the government “a chance” to save it.
05:48 AM BST
Gold hits record high
Gold climbed to a record high on Monday as investors rush to safety amid Mr Trump’s fast-evolving trade policy.
Bullion edged up to a new all-time high above $3,245 an ounce, beating the previous record posted on Friday. It gained more than 6pc last week, supported by ongoing declines in the dollar.
“Gold seems to be the clear beneficiary of the debates raging around the US dollar, and we’ve witnessed the gold price in absolute beast mode,” Chris Weston, head of research at Pepperstone Group, said.
05:43 AM BST
These unusual market moves show trust in the dollar may be breaking
Something strange is happening in the US.
As investors batten down the hatches over fears of a tariff-fuelled financial crisis, a rare split has opened up between the dollar and the yields that America’s government pays on its debts.
While somewhat technical, this essentially means that the Green Back is plunging at the same time as US borrowing costs are rising.
Already, this trend has panicked investors, who note that the two key financial metrics usually do the opposite by moving in tandem.
Read the full piece here
05:07 AM BST
Japan: US tariffs have potential to ‘disrupt global economic order’
US tariffs have the potential to disrupt the global economic order, Japanese Prime Minister Shigeru Ishiba said on Monday, in his strongest warning yet about the damage Donald Trump’s decisions could inflict on the world economy.
But he stressed that Japan would seek common ground with the US on how the two countries can co-operate on issues ranging from trade and national security.
“In negotiating with the United States, we need to understand what’s behind Trump’s argument both in terms of the logic and the emotional elements behind his views,” he told Parliament.
“I am fully aware that what’s happened so far has the potential to disrupt the global economic order.”
05:02 AM BST
Asian tech stocks bounce back
Shares in Asian tech companies that are major suppliers to companies like Apple, jumped on Monday after the US granted temporary exclusions from steep tariffs on smartphones, computers and some other electronics imported largely from China.
Shares in Foxconn, Apple’s largest iPhone assembler, gained around 4pc in Monday morning trade, with contract laptop maker Quanta up 7pc and Inventec - which also makes artificial intelligence servers - rising 4pc.
The broad index was up around 1pc.
Shares in China’s Goertek and Lens Tech - both Apple suppliers - also rose 3pc and 1.1pc.
Shares in South Korea’s Samsung Electronics, which supplies Apple and is also the second-ranked smartphone vendor in the US market, gained 2pc.
“We view the dizzying weekend tariff news as a step forward net positive for Apple as well as other tech names as it gives some flexibility and allows for China negotiations to hopefully take place in the coming months,” Wedbush Securities analyst Dan Ives said in a note.
04:57 AM BST
Good morning
Donald Trump has said a new tariff rate on chipmakers will be announced over the next week. Although, there will be some flexibility.
5 things to start your day
-
These unusual market moves show trust in the dollar may be breaking | Trump’s tariff blitz has put America’s safe haven status at risk
-
Trump allies say tariffs on smartphones could return in two months | President had quietly withdrawn the levies on Friday
-
Roger Bootle: Trump’s chaos has shattered confidence in America | The US president is unwittingly hastening the end of the dollar as the world’s only significant reserve currency
-
Trump loyalist Marjorie Taylor Greene bought shares before stock market rebound | Democrats call for investigation into congresswoman’s actions
-
Kamal Ahmed: When the gold price is soaring, we should all be afraid | Donald Trump is at war with himself – and putting the might of the US economy at risk
What happened overnight
Asian stocks rose on Monday as trade war fears were tempered by Donald Trump’s announcement of tariff exemptions for electronics, though the dollar weakened and safe-haven gold hit a fresh record amid fears the relief would be short-lived.
After the turmoil witnessed last week, markets got off to a relatively stable start following news on Friday that the White House would exempt smartphones, computers and other devices from painful “reciprocal” levies.
The announcement provided a much-needed injection of optimism for investors who had been sent scurrying for the hills in the wake of the US president’s tariff flip-flops and tit-for-tat measures by China.
All three main indexes on Wall Street finished solidly higher, helped by comments from a top Federal Reserve official that the bank was prepared to step in to support financial markets.
And Asia followed suit, with tech firms helping push Hong Kong more than 2pc higher, while Tokyo, Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Manila were all well up.