Global market rout deepens as Trump’s ‘reciprocal’ tariffs kick in

Today’s agenda: UK growth forecasts dip; visual story on China’s trade dominance; the race to make humanoid robots; and Martin Wolf on Trump’s “utter lunacy”

Good morning. Donald Trump’s “reciprocal” tariffs on US trading partners, including a 104 per cent levy on Chinese goods, have taken effect. Here’s what you need to know.

Market reaction: Equities in Hong Kong, Japan and Australia resumed their slide this morning. China allowed the renminbi to depreciate for a fifth straight day, pushing the currency to its weakest level against the dollar since September. US Treasuries, the dollar, stock futures and oil prices fell today just before the tariffs took effect.

Fallout widens: The additional tariffs could cut China’s GDP growth this year by 0.9 percentage points, according to Goldman Sachs. US executives warn the chaos is making it too risky to invest billions of dollars in building new American plants, despite Trump’s focus on “reshoring”. Carmakers are also holding their stock at US ports, resulting in a pile-up. Fitch has cut its forecast for global vehicle sales growth from 2.6 per cent to 2.2 per cent.

What’s next? Trump has appointed Treasury secretary Scott Bessent to lead talks with some US allies, including Japan and South Korea. Italy’s Prime Minister Giorgia Meloni is set to meet Trump in Washington next week. But even as they try to strike deals with him, some US trading partners are already discussing among themselves how to contain the damage. The EU has called for a “negotiated resolution” with China.

We’ll bring you the latest updates on our live blog. Here’s more analysis:

• Stay short on America: There is no school of foreign policy realism or trade mercantilism that could explain Trump’s actions, writes Edward Luce.

• Elizabeth Warren: Republicans should join Democrats in Congress to fix the crisis caused by Trump’s tariffs, writes the US senator.

• ‘Non-tariff weapons’: Countries are grappling with Washington’s attempts to change “barriers” including VAT, food rules and even currency valuations.

For more analysis on the tariffs, sign up for our Trade Secrets newsletter if you’re a premium subscriber, or upgrade your subscription. Here’s what else we’re keeping tabs on today:

• Economic data: The EU launches its new GDP calculation system, while the US Federal Reserve publishes minutes from its last rate-setting meeting.

• UK-India: Officials from both countries take part in an economic and financial dialogue in London.

• British Steel: Business secretary Jonathan Reynolds is due to meet executives from the company’s Chinese owner Jingye, as the UK considers nationalising the steelmaker.

Join Unhedged’s Robert Armstrong and other FT experts on April 23 for a subscriber-only webinar, as they break down how Trump’s policies are reshaping markets. Register for free.

Five more top stories

1. Trump’s trade war has helped push UK growth prospects this year down by a third even though Britain is far less exposed to the US president’s levies than its largest partners. As economists factor in weaker confidence and investment, here’s how much they expect GDP to grow this year.

2. One of the world’s best-known quantitative hedge funds has suffered steep losses from Trump’s tariffs, underscoring the tumult in financial markets since his announcements. Computer-driven Renaissance Technologies’ institutional equity strategy is down about 8 per cent for the month, shaving its gains for 2025 to 4.4 per cent. Read the full story.

3. Elon Musk lambasted the architect of Trump’s trade war in the most public display to date of a potential rift between the US president and the world’s richest man. Musk, a long-standing critic of tariffs, called trade tsar Peter Navarro a “moron” and “dumber than a sack of bricks”.

4. Ukrainian forces have captured Chinese fighters who were supporting Russian troops in eastern Ukraine, Volodymyr Zelenskyy has said. The president has demanded an explanation from Beijing and accused it of aligning itself with Russia in the conflict. This marks the first time Chinese citizens have been taken captive during the war.

5. The top investor at Australia’s largest superannuation fund says the US will continue to dominate its new investments despite market chaos caused by tariffs, in a vote of confidence from one of the most active foreign investors in the world’s largest economy. AustralianSuper’s chief investment officer told the Financial Times that the US was still attractive on a long-term basis.

Visual story

China’s domination of global trade has led to a schism with the US and left many other countries worried about their industries being crushed by Beijing’s export machine. Our latest visual story explores how the country’s record trade surplus helped spark Trump’s tariff war.

We’re also reading . . . 

• Trump ‘bro-sphere’: The conservative podcasters who helped the US president get elected are being tested by the massive fallout from his tariffs.

• Meloni and Africa: Amid criticism of hardball tactics to curb migration, Italy’s prime minister has launched a charm offensive on the continent.

• Humanoid robots: Cheaper components, fast-paced innovation and Beijing-led financing have helped give China a head start in the race to create lifelike bots.

• Rice crisis: The future of one of the world’s most important foodstuffs is mired in a stew of science, politics and economics, writes Anjana Ahuja

Chart of the day

The implicit assumption of Trump’s “reciprocal” tariffs is that in a fair world, trade would balance with every single partner. “This is utter lunacy”, writes Martin Wolf.

Take a break from the news . . . 

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