Trump tariffs live updates: City braces for trade war chaos as Europe markets open down on ‘Liberation Day’

Almost 90 minutes into trading and we’re seeing the falls continue.

The FTSE 100 is down more than half a per cent now and GSK’s losses have extended to 3.6 per cent.

However, anyone expecting Trump’s announcement to end the market drops might be disappointed.

“We’d argue the potential is in fact higher for the 2 April deadline to introduce even more uncertainty – and hence prolonged broad-based weakness in leading indicators,” said analysts at HSBC today.

There are certainly fears of retaliatory tariffs from some countries or blocs but everyone is in wait-and-see mode for now.

Price hikes and job losses could have a total global economic toll of $1.4 trillion (£1.1 trillion) under the worst-case scenario according to Aston Business School.

That is if “full global retaliation with reciprocal tariffs” is the eventual outcome, which would see the US economy in particular hit.

Quite aside from the businesses involved, government spending could also be impacted. Last week, Rachel Reeves noted the government was laying out savings to restore £9.9bn of headroom for government expenditure.

One assessment of a worst-case scenario involving Trump tariffs and the UK suggests that would be entirely and immediately wiped out.

Sir Keir Starmer has reportedly offered big US tech companies a major tax break in a last-ditch bid to dodge Donald Trump’s damaging tariffs.

The prime minister is prepared to lower the rate of the government’s digital services tax (DST) in a bid to win concessions from the president as a global trade war looms, it has emerged.

There is reportedly a deal on the table ready to be signed, covering areas such as artificial intelligence and other future technologies. But The Guardian on Wednesday also reported the UK has offered significant changes to the DST.

The move would reportedly see Britain lower the headline rate of the tax, in a major boost to major American firms such as Amazon, Facebook owner Meta and Google owner Alphabet, while at the same time applying the levy to companies from other countries.

The markets in London might be down this morning – 0.34 per cent for the FTSE 100, 0.2 per cent for the 250 – but the UK is faring better than European markets at this stage.

In France the CAC 40 is down almost half a per cent in early trading and the Euronext is down 0.6 per cent.

It’s in Germany though where the biggest fall can be seen, the DAX down 0.8 per cent.

Given it is the best-performing market in Europe this year so far, perhaps that’s not a huge surprise with some profit-taking probably included in that as well as removing a bit of risk.

Tariffs are taxes places on goods imported from other countries.

The measures essentially raise the price of imported good, making them less affordable for consumers.

Donald Trump hopes this boost the US economy by making domestically made goods cheaper than imported alternatives.

It is unclear what the US president will announce on Wednesday, but his administration views the application of VAT rate as discriminating against US goods and could respond with a 20 per cent tariff on imports from the UK.

Mr Trump has already announced a 25% import tax will be introduced on all cars imported to the US, a measure which will be a blow to the UK’s automotive industry.

Overnight in Asia, the markets had spent most of the day in negative territory but rallies later on saw Japan’s Nikkei 225 actually close 0.28 per cent up, with the Hang Seng essentially now flat.

It appears most of the investing world is very much hedging bets ahead of Trump’s tariffs speech, though it’s worth noting the one commodity which has continued to increase over the past month is gold.

After consecutive new all time highs, however, peaking at around $3,175 yesterday, the price of gold futures has just pulled back slightly to around $3,140.

Analysts forecast that continuing to rise through 2025, some as high as $3,300.

Ahead of president Trump’s announcements today, the FTSE 100 has opened slightly lower – 0.3 per cent down in immediate trading, with a handful of companies individually down one per cent or more.

They include pharma business GSK, Endeavour Mining and Rentokil, who have a growing business Stateside.

The biggest early faller is housebuilder Persimmon though, down 1.5 per cent to start the day.

My Manchester-based business making editing equipment was hit hard when Donald Trump introduced tariffs on China – another round will cost me dearly, says Mark Brown.

Read the full comment piece here:

The UK is in a “strong position” to strike an economic deal with the US but is “entering a challenging period”, Bridget Phillipson said.

The Education Secretary told Sky News: “We know that we’re entering a challenging period and a trade war with the US would be in no one’s interests.”

She added: “We believe we are in a strong position to strike that kind of deal.”

Asked whether the Government would consider abandoning its fiscal rules in the event of exceptional trade circumstances, she said: “I’m not going to speculate on hypotheticals, not least because those negotiations are still under way.

“We’re working incredibly hard to secure a deal that’s in Britain’s national interest, but fiscal rules do matter.

“They matter because we have to demonstrate that we have a clear sense about how we manage the public finances.

“I think your viewers will have seen in recent years with the Liz Truss government, what happens when you have a government that doesn’t have a grip on the public finances and isn’t prepared to make choices about priorities, and our fiscal rules are important, and they do matter.”

Donald Trump’s administration is considering a 20% tariff on most imports, reports have claimed.

The Washington Post reported that White House aides have drafted a proposal that would levy tariffs as such.

It also reported that there were several options still on the table.