Stock markets plunge as Trump backlash begins – Daily Business

Stock markets suffered further sharp falls today, losing almost $5 trillion since President Donald Trump announced his tariffs on Wednesday evening.

The UK’s top tier FTSE 100 suffered its worst day since the start of the pandemic five years ago, prompting Prime Minister Sir Keir Starmer to hold calls with the leaders of Australia and Italy to discuss how to respond.

London’s blue chip index lost 419.75 points, or 4.95%, to close at 8,054.98, its biggest fall since the 600 points loss in March 2020. All three of the key US indices were down by between 5% and 6%.

UK goods heading to the US will be subject to a 10% import tax from this weekend, while imports from the EU will be hit with a 20% levy.

Downing Street said that Sir Keir, Anthony Albanese inAustralia and Italy’s Giorgia Meloni “all agreed that an all-out trade war would be extremely damaging”.

Sir Keir will not “rush to retaliate” and will be speaking to other world leaders and seek a measured response.

All but one stock on the FTSE 100 fell on Friday, with Rolls-Royce (down 11.7%), banks and miners among those to suffer the biggest losses.

China said it would retaliate with an additional 34% tax on US goods from next week after Trump announced a raft of global tariffs. Its finance ministry said the US tariffs on Chinese products are “not in line with international trade rules”.

AJ Bell investment analyst Dan Coatsworth said: “We’ve now seen $4.9 trillion wiped off the value of the global stock market since the Liberation Day speech.

“The escalation in tariffs is bad for US companies who buy goods from China, and vice versa, because their costs will go up.

“It’s also bad for the world in general as we now have a repeat of the heightened geopolitical tensions between the US and China which dominated Trump’s first term in office.

Chancellor Rachel Reeves said the Government is “determined to get the best deal we can” with Washington.

“Of course, we don’t want to see tariffs on UK exports, and we’re working hard as a government in discussion with our counterparts in the US to represent the British national interest and support British jobs and British industry,” she said.

The White House insisted Americans are “already seeing the early results” of Donald Trump’s tariff move, despite US markets dropping sharply for a second consecutive day.

It said Japanese car firm Nissan has announced it will maintain two shifts at a production facility in Tennessee, before adding that General Motors announced it will boost truck production at its Indiana plant.

“In fact, President Trump has secured more private investment in his first 11 weeks than the Biden administration secured in its entire first term – and that doesn’t even include the trillions of investment from foreign governments,” the White House said in a statement.

Before the US stock market opened, US President Donald Trump posted positive reaction to a stronger than expected job market report which showed US employers added 228,000 jobs last month.

“Great job numbers, far better than expected,” Trump wrote on his Truth Social account. “It’s already working. Hang tough, we can’t lose!!!”

Earlier, the US Federal Reserve chair warned that the tariffs are likely to boost inflation and slow economic growth as a global stock market sell-off deepens.