Donald Trump’s threats of additional trade tariffs against China, on top of the 10% hike imposed earlier this month, have contributed to a widespread stock market sell-off.
Sentiment was already sour on the tariff front, given the spectre of 25% import duties being slapped on the EU, before the US president confirmed his intention to target Canada, Mexico and China next week.
Mr Trump said his proposed 25% tariffs on Mexican and Canadian goods – delayed by a month – would take effect on Tuesday 4 March as planned, alongside an extra 10% duty on Chinese imports.
Beijing’s reaction was to threaten further retaliation, building on the market fears that the Trump administration was risking a deepening global trade war.
Asia felt the most pain in equities after a 1.6% decline was registered on the broad S&P 500.
The Hang Seng in Hong Kong fell more than 3%, while Japan’s Nikkei slumped to a five-month low as demand soared for the safe haven yen.
More from Money
In Europe, the DAX in Germany and French CAC were on course to build on declines seen on Thursday, with the manufacturing-heavy DAX losing just shy of 1% at the open.
The UK may have been spared Trump tariff threats – and even promised renewed trade talks during PM Sir Keir Starmer’s meeting at the White House on Thursday – but the FTSE 100 was still feeling some pain.
A decline of 0.4% was registered in early trading.
The main fear among investors is damage to the global economy from a widening and protracted trade fight as Mr Trump battles to secure American jobs through the imposition of tariffs.
But one consequence of higher import costs due to the duties is the fact they risk stoking US inflation, as costs are passed on.
Brent crude oil was down by almost 1% to trade at $73 a barrel.
Cryptocurrencies took the largest hammering.
Bitcoin was 27% below its record high set in January at $79,740 and down by 6% on the day.
Please use Chrome browser for a more accessible video player
3:02
China hits back at new US tariffs
Mr Trump told reporters in the Oval Office he decided to add the extra tariffs on China and stick to the Tuesday deadline for Canada and Mexico given what his administration sees as insufficient progress on curbing fentanyl flows into the country.
“There are ongoing discussions with the Chinese, Mexico and Canada,” a White House official told the Reuters news agency.
“We’ve gotten a good handle on the migration issue, but there are still concerns on the other issue of fentanyl deaths.”
It was a narrative that was firmly rejected by China’s foreign ministry.
A spokesperson said China would take all necessary measures to firmly safeguard its legitimate interest.
“The US is once again using the fentanyl issue as a pretext to threaten China”, Lin Jian told a regular news conference.
Commenting on the downbeat market mood Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The only certainty in this saga is uncertainty, so keep a close eye on developments between now and 4 March.
“Next on the agenda is reciprocal tariffs pencilled in for 2 April with other major US trading partners. The EU, in particular, will be in focus.
“An amicable start to talks with UK premier Keir Starmer looks to have set the tone for a potential trade deal with the UK but with no details outlined it has not been enough to boost enthusiasm for London listed shares.”
Zohran Mamdani calls himself “Donald Trump’s worst nightmare”. They are the words of a man living the dream.
It’s because the 34-year-old is the headline act in Tuesday’s referendum on Trump 2.0. A statement night in US politics, as Americans – some, at least – deliver a verdict on what they’ve seen so far.
Of four electoral contests across the US – including in California, New Jersey and Virginia – the race to be New York mayor is the most compulsive and consequential.
The polls have Mamdani, the Democratic nominee, as the frontrunner. If he wins, it would signify big change in the Big Apple.
Born in Uganda to Indian parents (he moved to the US aged seven), Mamdani would become New York’s first Muslim mayor.
He is a democratic socialist whose supporters will see victory as laying down a template for taking on Trump, even if the party’s old guard is sceptical.
An effective campaign has focused on the costs and quality of life in New York, promising universal childcare, a rent freeze, free bus travel and grocery shops run by the city.
Image: Progressives Bernie Sanders and Alexandra Ocasio-Cortez have endorsed Mamdani. Pic: Andrea Renault/STAR MAX/IPx/AP
So why is he controversial?
The message has resonated with New Yorkers squeezed on affordability, but his payment plan is open to question.
Mamdani plans to raise $9bn by raising taxes on the wealthy and on corporations, but he would face a struggle to gain the necessary consent of the New York State legislature and governor.
Mamdani’s politics are pegged to the “progressive” left wing of his party, and his campaign success plays into the Democrats’ quandary around a longer-term comeback strategy.
The politics that succeed in New York don’t necessarily resonate nationwide, and a party establishment has been reluctant to embrace Mamdani.
Democrat Chuck Schumer, Senate minority leader, has declined to endorse him at all.
Party management aside, he won’t have been impressed when Mamdani was arrested outside Schumer’s Brooklyn home as part of a 2023 protest calling for a ceasefire following Hamas’ October 7th attack on Israel.
Mamdani has been a staunch critic of Israel and, in the past, has advocated defunding the police, decriminalising prostitution and closing New York City jails.
Image: Mamdani was at the White House to announce a hunger strike demanding a permanent ceasefire between Israel and Gaza in November 2023. Pic: AP
His background and Islamic faith are threaded through opposition attacks. He has been criticised for refusing to denounce the phrase “globalise the intifada”, used by pro-Palestinian activists.
Subsequently, he said he would “discourage” the term and would combat antisemitism through actions as well as words.
It hasn’t stopped his Republican rival, Curtis Sliwa, claiming Mamdani supported “global jihad”.
Andrew Cuomo, running as an independent after losing the Democratic primary to Mamdani, has labelled him “the most divisive candidate I have ever experienced in New York”.
The president, who falsely labels Mamdani a communist, said on Truth Social on the eve of the election: “Whether you personally like Andrew Cuomo or not, you really have no choice.
“You must vote for him, and hope he does a fantastic job. He is capable of it, Mamdani is not!”
At a rally the same night, Mamdani fired back to say: “The MAGA movement’s embrace of Andrew Cuomo is reflective of Donald Trump’s understanding that this would be the best mayor for him.
“Not the best mayor for New York City, not the best mayor for New Yorkers, but the best mayor for Donald Trump and his administration.”
Follow the World
Listen to The World with Richard Engel and Yalda Hakim every Wednesday
The Republican spin on the prospect of a Mamdani victory is that it would reflect a move towards radical extremism by the Democratic Party.
Trump has even suggested he may withhold federal funds from New York if Mamdani wins.
In time, Democrats would need to interpret and apply the lessons of a Mamdani victory. But more than anything else, they need a win to feel a pulse in a party undergoing an identity crisis.
Image: During the primaries, Mamdani held a news conference outside Cuomo’s apartment in March. Pic: zz/Andrea Renault/STAR MAX/IPx
One battle after another
The same applies to Tuesday contests for governor in New Jersey and Virginia, fascinating in terms of the vote winners and vote breakdown.
What will be the verdict, nine months in, of people who turned to Trump at the last election? Will he hold onto the Latino vote, given his immigration policy, ICE raids, and other orders?
In California, Tuesday sees a redistricting vote to counter Republican gerrymandering elsewhere. If backed by the public, the plan will increase the number of winnable Democratic seats in the House of Representatives.
Donald Trump sits down for an interview with CBS’ 60 Minutes – the programme he sued successfully for $16m just four months ago.
All the while, his poll numbers are at an all-time low due to the government shutdown, as hundreds of thousands of federal workers remain unpaid and food benefits for millions of people run out.
And is this the week the real Democrats stand up? Their favourability numbers are also dire, but will the emergence of a firebrand left-wing mayor in New York City, in the shape of Zohran Mamdani, and a handful of positive off-year election results on Tuesday be the spark they desperately need to counter Trump’s MAGA agenda?
Donald Trump has said he feels “badly” for the Royal Family after Andrew Mountbatten Windsor was stripped of his titles – as it emerged he could also be stripped of his honorary rank of vice admiral.
Speaking to reporters on board Air Force One, the US president was asked about his thoughts on the King’s decision to strip his brother of his peerages in the wake of further disclosures about his relationship with paedophile financier Jeffrey Epstein.
“It’s a terrible thing that’s happened to the family,” Mr Trump said. “That’s been a tragic situation. It’s too bad. I feel badly for the family.”
Please use Chrome browser for a more accessible video player
0:27
Government ‘looking to remove’ Andrew’s final remaining rank
He lost his last remaining royal titles and privileges following the posthumous publication of a memoir by Virginia Giuffre, one of Epstein’s victims.
She had accused Andrew of sexual assault and sued him in August 2021. The case was settled outside court for a sum believed to have been around £12m.
Andrew has denied allegations of sexual assault made by Ms Giuffre, and has repeatedly denied all wrongdoing.
More on Donald Trump
Related Topics:
Please use Chrome browser for a more accessible video player
1:38
What’s in the Andrew-Epstein email exchange?
Ms Giuffre, who took her own life earlier this year, claimed that – as a teenager – she had sex with Andrew on three occasions after being trafficked by billionaire paedophile Epstein and his ex-girlfriend Ghislaine Maxwell.
Andrew has always denied the allegations.
Ms Giuffre’s family hailed the King’s decision to remove Andrew’s titles, saying: “An ordinary American girl from an ordinary American family, brought down a British prince with her truth and extraordinary courage.”
Mr Trump has also come under pressure over his ties to Epstein. After the financier’s death in 2019, the US president downplayed their relationship and said he had “no idea” about Epstein’s crimes.
Image: Donald Trump was asked about Andrew losing his titles while on Air Force One. Pic: AP
Andrew could lose vice admiral rank – Healey
It comes after Defence Secretary John Healey told Sky’s Sunday Morning with Trevor Phillipsthat the former prince could be stripped of his honorary rank of vice admiral
Andrew was made a vice admiral on his 55th birthday in 2015 and retained the rank even after giving up his other military positions in 2022.
He had a career spanning more than 20 years in the Royal Navy, and served in the Falklands War.
Mr Healey told Sky News: “We’ve seen Andrew surrender the military positions that he’s had and we’re looking now at the one remaining position he has, which is the honorary vice admiral position and, we’ve got a process underway for that.”
Asked what that process is, he said: “We’re being guided by the King and we’re now looking to remove.”
Image: Pic: Reuters
Mr Healey was also asked if the government would legislate to remove Andrew from the line of succession.
He said that is a “matter for the King” but his personal view is “it’s neither here nor there” as Andrew has lost all other of his royal titles.
Meanwhile, Kevin Hollinrake, the Conservative Party chairman, told Trevor Phillips: “Andrew’s 8th in line to succession of the monarchy.
“Parliament’s got many better things to do than to legislate for something that will never happen.”
Now simply known as Andrew Mountbatten Windsor after losing his titles, he will move from Royal Lodge to the Sandringham estate in Norfolk – with his future accommodation to be privately funded by the monarch.
Please use Chrome browser for a more accessible video player
2:19
Could Andrew face US Congress?
Pressure is now building on Andrew to give evidence before a powerful US Congressional committee.
The House Oversight Committee is investigating the Epstein affair, and several of its members have invited Andrew to come and give evidence, presenting it as an opportunity to clear his name.
Royal biographer Andrew Morton said he believes there “are more revelations to come” about Epstein from the committee.
He told Sky News: “Given the fact that Andrew hasn’t been fully comprehensive in his admissions and emails have emerged which go further than his Newsnight interview, I think that will be the fear inside the palace.”
In a 2019 interview with Newsnight, Andrew claimed that he cut off contact with Epstein in 2010 following his release from jail for prostituting minors.