Stock sell-off resumes as Trump’s China tariffs spook investors

In the present day’s agenda: Switzerland seeks nearer EU ties; unique interview with Ursula von der Leyen; espresso costs at breaking level; and Naomi Campbell’s charity scandal

Good morning. International shares resumed their sell-off as banks and traders warned that Donald Trump’s tariffs may tip the US into recession.

Market turbulence: Asian markets tumbled this morning whereas gold hit a file excessive. An index of the greenback towards a half-dozen buying and selling companions’ currencies slid previous a key threshold for the primary time since July 2023 as a rush from US belongings despatched the yen, euro and sterling surging. In a single day, the S&P 500 dropped 3.5 per cent, a pointy turnaround from the earlier session’s 9.5 per cent surge, whereas the tech-heavy Nasdaq Composite dropped 4.3 per cent after its greatest day since 2001.

What Wall Road is saying: Banks and traders mentioned Trump’s choice to hoist duties on Chinese language imports as excessive as 145 per cent and maintain in place a ten per cent common tariff introduced a severe threat for the American financial system. “Mixed with the continued coverage chaos on commerce and home fiscal issues, together with the still-large losses in fairness markets and hit to confidence, it stays troublesome to see the US avoiding recession,” JPMorgan mentioned in a observe to purchasers.

Read the FT’s live coverage of the global fallout, observe the most recent on tariffs and govt orders in our Trump tracker and scroll right down to learn our story on one surprising winner from the tariff chaos.

• Client influence: US retailers are warning of upper costs, as analysts estimate Trump’s levies may value the typical family $4,700 a year.

• Greenback’s standing: The US could be better off with out the greenback’s position because the dominant “secure” foreign money, writes Michael Pettis of the Carnegie Endowment.

• Opinion: Trump’s tariffs are testing American attitudes in direction of ache and shared adversity, writes Gillian Tett.

For extra on markets, join the Unhedged publication here if you happen to’re a premium subscriber or improve your subscription here. Right here’s what else we’re retaining tabs on in the present day and over the weekend:

• Financial knowledge: Germany reviews March inflation figures, whereas the UK has its February GDP estimate.

• Nato: The UK and Germany chair the Ukraine Defence Contact Group assembly in Brussels.

• Gabon: The African nation holds its presidential election tomorrow.

• Firms: Wall Road banks start reporting outcomes in the present day, led by JPMorgan Chase, Morgan Stanley, BNY and Wells Fargo.

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5 extra high tales

1. Unique: The EU is ready to deploy its strongest commerce measures and will impose levies on US digital firms if negotiations with Trump fail to finish his tariff battle towards Europe. European Fee president Ursula von der Leyen advised the Monetary Occasions that the EU would search a “utterly balanced” settlement with Washington throughout Trump’s 90-day pause on extra tariffs. Read the full interview.

2. Unique: OpenAI has slashed the time and assets it spends on testing the security of its highly effective synthetic intelligence fashions, elevating issues that its know-how is being rushed out with out ample safeguards. One particular person testing the upcoming o3 mannequin mentioned: “I hope it isn’t a catastrophic mis-step, however it’s reckless. It is a recipe for catastrophe.” Here’s what’s driving the time crunch.

3. Swiss President Karin Keller-Sutter will be part of an EU finance ministers’ assembly in Warsaw in the present day, the primary time the Alpine nation has executed so, as Trump’s tariff battle reignites a long-standing debate in Switzerland: whether it should inch closer to the EU, its largest trading partner.

4. Bridget Brink, the US ambassador to Ukraine, is stepping down following coverage disagreements with the Trump administration. Folks accustomed to Brink’s choice mentioned she had come beneath rising stress from senior administration figures who questioned her willingness to support their Ukraine strategy.

5. Collectors are more and more struggling to get better unpaid money owed in England and Wales as funding pressures have led to “extraordinarily sluggish and ineffective” enforcement of court docket orders, in line with the Civil Justice Council. The physique mentioned the “incapability to implement successfully by the County Court docket has destroyed confidence amongst creditors”.

The Massive Learn

As European cities battle to cope with a post-pandemic resurgence of mass tourism, short-term letting platforms resembling Airbnb, Vrbo and Reserving.com are as soon as once more within the line of fireside. Residents of vacationer hotspots have lengthy demanded the platforms be banned, however with reserving numbers rising, vacation leases are winning the war for Europe’s city centres.

We’re additionally studying . . . 

• £4 espresso: Client tolerance for soaring coffee prices is at a breaking level, the chief govt of Italian espresso roaster Lavazza advised the FT.

• Tariff winner: The turmoil from Trump’s commerce insurance policies has ensnared the whole automotive business aside from French group Renault. Here’s why.

• Germany’s ‘Black Zero’ statue: The quiet retirement of the Schwarze Null, a logo of the nation’s fixation on balanced budgets, encapsulates the seismic shift under way in Europe’s largest financial system.

• North Sea wind farms: As seabeds refill with ever greater generators, operators are asking: is there enough wind to go around?

Chart of the day

Arctic sea ice hit a file low for the tip of the area’s winter final month, as melting opens up the North Pole to increased military and energy exploration by Russia and different international locations.

Take a break from the information

Naomi Campbell’s charity Trend for Aid led to shame, with the supermodel banned from working any charity for 5 years. Now, Campbell is laying out what she says actually occurred — and tells a story of stolen identity, siphoned funds and betrayed friendship.