Tariffs live: Global markets unstable while Trump says US ‘doing really well’ on trade policy

Business and Money Editor Karl Matchett has taken a look at the US stock markets shortly after they opened:

The S&P 500 has jumped up and down sharply in the opening hour of trading, above and below the flat line, but it’s now down 0.8 per cent – with the Dow Industrial similar and the Nasdaq 0.9 per cent down.

The markets opened after China announced it was retaliating to higher US tariffs by raising its levies on American goods to 125 per cent.

Individually, there are some bigger falls on the board already: Tesla has dropped to more than 2.5 per cent in the red, Workiva is down three per cent and Bank of America is down 1.6 per cent.

But Microsoft, Apple and Nvidia, as other examples, are all flat or even slightly up – 1.25 per cent up, in the case of the latter, so it’s far from the across-the-board drop we’ve seen on other days. So far, at least.

The World Trade Organisation’s chief economist says tariffs can have “wide-ranging, and often unintended, consequences”.

Ralph Ossa said tariffs are seemingly simple: they are a tax on imported goods. So a 10 per cent tariff on a product with a world price of $50 would become $55 in the domestic market, with the $5 collected as tax revenue by the local government.

However, he said these taxes can have ripple effects throughout the economy, “altering prices, wages, exchange rates and trade patterns”.

As tariffs return to the trade policy agenda, it is worth recalling what economics has long understood: tariffs are not just a tool for raising revenue or protecting domestic industries – they are a policy lever with wide-ranging, and often unintended, consequences,” he said in analysis for the WTO.

“Their appeal in the short term can obscure longer-term costs to inflation, competitiveness and international cooperation. In a world of growing trade tensions, a clear-eyed view of those trade-offs is more important than ever.”

The US president might have delayed the most aggressive parts of his sweeping tariff hikes, but leading economists and analysts say the risk of a global recession has not gone away.

Economist Pau S Pujolas – who accused the US government of misinterpreting his work earlier this week – said that even if Donald Trump decides not to reintroduce the high tariffs, the global economic risk remains “until either Trump stops playing the tariff game, or Congress removes the power vested on the President”.

“Yes, the damage is done. Global value chains are suffering with all the recklessness, uncertainty is a good friend of recession,” he told The Independent.

Dan Coatsworth, investment analyst at AJ Bell, said the past week of uncertainty alone could have had “a major negative impact on spending” and hurt economies, but that uncertainty was continuing.

“The risk of a global recession remains high until there is more clarity on tariffs longer term,” he said.

US President Donald Trump said he had been watching the bond market before deciding on a U-turn on his aggressive tariff hikes.

“The bond market is very tricky, I was watching it. But yeah, I saw last night where people were getting a little queasy,” he said, announcing a 90-day pause.

Data Correspondent Alicja Hagopian has looked at why bond market turmoil spelt serious trouble, not just for Mr Trump, but for the world:

Donald Trump has defended his tariff policies.

Posting on his Truth Social, the US President said: “We are doing really well on our TARIFF POLICY.”

“Very exciting for America, and the World!!! It is moving along quickly,” he wrote.

China’s Foreign Ministry spokesperson Mao Ning has been quoting Chairman Mao on social media showing the strength of anti-US sentiment after the tariffs.

She posted a black-and-white clip taken during the Korean War when Mao told the US that “no matter how long this war lasts we will never yield”.

Ning added her own comments: “We are Chinese. We are not afraid of provocations. We won’t back down.”

In another post, she quoted Mao calling America a “paper tiger”.

French Prime Minister Francois Bayrou said it was ‘dangerous’ to think China could replace the US as a trading partner.

“The idea that the United States could be replaced by China is a terribly dangerous idea,” Bayrou said on Friday during a visit to a fair for cheese and wine.

His comments come after Chinese President Xi Jinping told Spain’s prime minister that China and the EU must join together to oppose “unilateral acts of bullying”.

With share markets fluctuating wildly amid the Trump administration’s on-again, off-again tariff hikes and the escalating trade war between the US and China, investors have flocked to gold.

Gold is seen as a safe asset during times of crisis, and on Friday the price of bullion hit a record high of $3,227.07 per ounce.

Here’s how investors buy gold, and what affects the market for bullion.

President Donald Trump’s sweeping tariffs are poised to inflate the prices US shoppers pay for many German products – from Birkenstock sandals to Paulaner beer and Riesling wine.

Trump’s tariff offensive is testing relations between the two allies, threatening their two-way trade and risking major damage to an already limping German economy.

And for German companies, it will test whether US consumers – long willing to pay more for the renowned quality of the country’s goods – can stomach even higher prices at a time when US policies threaten to spark a recession.

“Both European producers and US consumers will suffer,” said Rodger Wegner, president of the Association of Exporting Breweries, which represents German beer brands including Karlsberg, Lowenbrau and Radeberger.

Germany, like most of the world, is now subject to a 10 per cent tariff on its exports to the United States. But a 20 per cent rate is still looming despite a 90-day pause.

The duties could not come at a worse time for Europe’s biggest economy, with economists predicting the trade turmoil could put it on track for a third year of recession for the first time in its history.

British-based car maker Lotus has announced it is laying off up to 270 workers, blaming in part the Trump Administration’s higher tariffs for the need to cut costs.

The company remained “committed to the UK”, but a spokesperson told the BBC that a restructure was needed “amid volatile and evolving market conditions including the US tariffs and shifting consumer demand for sports cars”.

Lotus, based in Norfolk, is owned by Chinese company Geely Holding, and the Lotus spokesperson said it plans to share more resources with the larger conglomerate.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders said the sector had already been facing immense pressures, but the new headwinds were “severe”.

“Automotive is acutely impacted by the tariffs levied, which remain at the forefront of UK minds,” he said in a statement, urging the UK government to do more to support the sector.