US markets continue to fall as Trump tariffs on China now 145%
After the Wall Street stocks were down again, President Trump acknowledged the markets had "transition problems", as ITV News US Correspondent Dan Rivers reports
The US stock market continued to fall on Thursday despite earlier gains in the European and Asian markets following Donald Trump's decision to delay planned "reciprocal" tariffs on most countries for 90 days.
The losses continued to accelerate after the White House clarified that Chinese imports would be tariffed at 145%, and not the 125% rate that Trump had written about in his Truth Social post on Wednesday, once his previous 20% fentanyl tariffs were included.
Opening a Cabinet meeting on Thursday, the US president defended his moves on tariffs but admitted there would be some "transition problems".
"We think we're in very good shape. We think we're doing very well," he said.
"Again, there'll be a transition cost and transition problems, but in the end, it's going to be, it's going to be a beautiful thing."
The Dow Jones, after rising nearly 3,000 points Wednesday, fell more than 1,383 points, or 3.4%, on Thursday afternoon.
By midday the S&P 500 was down 4.1%, retreating on its 9.5% gains from Wednesday while the tech-heavy Nasdaq composite was down 4.8%
Chinese goods were not included in Trump's pause, with the US president instead opting to sharply increase its already-high levies, accusing Beijing of refusing to negotiate in good faith and retaliating.
This came after China responded to Trump’s earlier tariff hike of 104% with its own 84% tariffs on US imports, which took effect on Thursday.
Unlike other nations, America's top trade rival has refused to seek talks, describing the US as a "bully" and that it will “fight to the end” in a trade war.
China's Foreign Ministry Spokesperson Lin Jian said on Thursday that the US is acting out of "selfish interests" and is using tariffs as a weapon to exert maximum pressure and "seek selfish gains".
"This undermines the rules-based trade system and destabilises global economic order," he continued.
Though Trump said earlier that: "At some point, hopefully in the near future, China will realise that the days of ripping off the USA, and other countries, is no longer sustainable or acceptable."
Trump rows back on retaliatory tariffs
Trump made the surprise move on Wednesday in response to falling markets and officials around him getting "afraid", adding nations were eager to strike new trade deals.
He wrote on Truth Social on Wednesday that the "90-day pause" was for the "more than 75 countries" who had not retaliated against his tariffs "in any way".
During this period they would still have to pay a "substantially lowered" 10% tariff, which is "effective immediately".
Trump said he had been "thinking about" the pause for the last few days
It is lower than the 20% tariff Trump had set for goods from the European Union, 24% on imports from Japan and 25% on products from South Korea.
Countries that have already been hit with a 10% levy since last week - including the UK - are not affected by the pause.
The EU has responded by matching the pause on its reciprocal tariffs, with Commission President Ursula von der Leyen saying the bloc "took note of the announcement by President Trump".
New tariffs on 20.9 billion euros (£17.9 billion) of US goods will be put on hold for 90 days in order "to give negotiations a chance”.
But von der Leyen warned that if negotiations "are not satisfactory", then "countermeasures will kick in”.
British Prime Minister Keir Starmer meanwhile has said the UK must "rise to the moment" over tariffs, rather than choose to "sit back and hope". The UK had been spared the higher rates given to most countries, but the 10% baseline levy on all goods entering the US remains in place.
The UK did not respond to the original tariffs with any reciprocal action.
Speaking on a visit to Doncaster, Starmer said: “I’m not going to stand here and pretend that tariffs are good news. That is not true, and you wouldn’t believe me if I said it, but just as we’ve seen recently on defence and security across Europe, and with Ukraine, they do make one thing very clear, and that is that the world is changing, and we as a country must change with it.
“In other words, we’ve got to rise to the moment here, recognise where our future lies, renew Britain and deliver security for working people.”
How did markets respond to Trump's announcement?
Markets reacted positively to the temporary easing of trade tensions.
Germany's DAX index was up more than 5% by mid-afternoon on Thursday, as was France's CAC 40, while the FTSE 100 had jumped 4%.
The UK’s FTSE 100 surged more than 6% after markets opened on Thursday, gaining around 475 points in early trading, before settling to a 3.8% uptick by mid-afternoon.
In Asia, Japan’s Nikkei rose 9%, while the broader Topix gained 8%, China’s CSI300 closed 1.35% higher, the Hang Seng Index in Hong Kong rose 2.1% and the Shanghai Composite Index gained 1.2%.
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