International stock markets have fallen dramatically overnight amid fears of a global trade war following Donald Trump’s sweeping tariffs, which he called “medicine”.
Japan’s Nikkei 225 stock index dived nearly 8%, Australia’s S&P/ASX 200 fell more than 6%, and South Korea’s Kospi lost 4.4%.
Meanwhile US stock market futures signalled further weaknesses, with the future for the S&P 500 losing 4.2% and the Dow Jones Industrial Average falling 3.5%, while the future for the Nasdaq lost 5.3%.
Mr Trump warned foreign governments would have to pay “a lot of money” to lift his tariffs, which he described as “medicine”.
“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said on Air Force One.
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The US president said he had spoken to leaders from Europe and Asia over the weekend who had hoped to convince him to lower the tariffs, which are due to come into effect this week.
“I spoke to a lot of leaders, European, Asian, from all over the world,” Mr Trump said. “They’re dying to make a deal. And I said, we’re not going to have deficits with your country. We’re not going to do that because to me, a deficit is a loss. We’re going to have surpluses or, at worst, going to be breaking even.”
Mr Trump, who spent much of the weekend playing golf in Florida, posted on his Truth Social platform: “WE WILL WIN. HANG TOUGH, it won’t be easy.”
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Trump’s tariffs: What you need to know
On Saturday, US customs agents began collecting Mr Trump’s unilateral 10% tariffs on all imports from many countries.
Higher “reciprocal” tariffs of between 11% and 50% on individual countries are due to come into effect on Wednesday.
Mr Trump’s tariff announcements have jolted economies around the world, triggering retaliatory levies from China and
sparking fears of a global trade war and recession.
Investors and political leaders have struggled to determine whether the tariffs are here to stay, or are part of a permanent new regime or a negotiating tactic to win concessions from other countries.
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It comes after Sir Keir Starmer promised “bold changes” as he announced he will relax rules around electric vehicles after carmakers were hit by Mr Trump’s tariffs.
The prime minister said “global trade is being transformed” after the US president‘s 25% levy on imported cars, and 10% tariff on other products, came into force.
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‘Nothing off the table’ over tariffs
Meanwhile, KPMG warned US tariffs on UK exports could see GDP growth fall to 0.8% in 2025 and 2026.
The accountancy firm said higher tariffs on specific categories, such as cars, aluminium and steel, would more than offset the exemption on pharmaceutical exports, leaving the effective tariffs imposed on UK exports at around 12%.
Yael Selfin, chief economist at KPMG UK, said: “Given the economic impact that tariffs would cause, there is a strong incentive to seek a negotiated settlement that diminishes the need for tariffs. The UK automotive manufacturing sector is particularly exposed given the complex supply chains of some producers.”
Iran says “indirect talks” over the country’s rapidly advancing nuclear programme have taken place with US officials, with more to come next week.
The discussions on Saturday took place in Muscat, Oman, with the host nation’s officials mediating between representatives of Iran and the US, who were seated in separate rooms, according to Esmail Baghaei, a spokesperson for Iran’s foreign ministry.
After the talks concluded, Oman and Iranian officials reported that Iran and the US had had agreed to hold more negotiations next week.
Oman’s foreign minister Sayyid Badr Albusaidi tweeted after the meeting, thanking Iran’s foreign minister Abbas Araghchi and US Middle East envoy Steve Witkoff for joining the negotiations aimed at “global peace, security and stability”.
“We will continue to work together and put further efforts to assist in arriving at this goal,” he added.
(L-R) Iranian foreign minister Abbas Araghchi meets his Omani counterpart Sayyid Badr Albusaidi. Pic: Iranian foreign ministry/AP
Iranian state media claimed the US and Iranian officials “briefly spoke in the presence of the Omani foreign minister” at the end of the talks – a claim Mr Araghchi echoed in a statement on Telegram.
He added the talks took place in a “constructive atmosphere based on mutual respect” and that they would continue next week.
American officials did not immediately acknowledge the reports from Iran.
Mr Araghchi said before the meeting on Saturday there was a “chance for initial understanding on further negotiations if the other party [US] enters the talks with an equal stance”.
He told Iran’s state TV: “Our intention is to reach a fair and honourable agreement – from an equal footing.
“And if the other side has also entered from the same position, God willing, there will be a chance for an initial agreement that can lead to a path of negotiations.”
Reuters news agency said an Omani source told it the talks were focused on de-escalating regional tensions, prisoner exchanges and limited agreements to ease sanctions in exchange for controlling Iran’s nuclear programme.
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Trump on Monday: ‘We’re in direct talks with Iran’
President Donald Trump has insisted Tehran cannot get nuclear weapons.
He said on Monday that the talks would be direct, but Tehran officials insisted it would be conducted through an intermediary.
Mr Trump also warned Iran would be in “great danger” if negotiations fail.
“Hopefully those talks will be successful, it would be in Iran’s best interests if they are successful,” he said. “We hope that’s going to happen.”
He added Iran “cannot have a nuclear weapon, and if the talks aren’t successful, I actually think it will be a very bad day for Iran”.
The comments came after Mr Trump’s previous warnings of possible military action against Iran if there is no deal over its nuclear programme.
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Saturday’s meeting marked the first between the countries since Mr Trump’s second term in the White House began.
During his first term, he withdrew the US from a deal between Iran and world powers designed to curb Iran’s nuclear work in exchange for sanctions relief.
He also reimposed US sanctions.
Iran has since far surpassed that deal’s limits on uranium enrichment.
Tehran insists its nuclear programme is wholly for civilian energy purposes but Western powers accuse it of having a clandestine agenda.
Mr Witkoff came from talks with Russian president Vladimir Putin on Friday, as the US tries to broker an end to the war in Ukraine.
Palestinian student activist Mahmoud Khalil can be deported from the US, an immigration judge has ruled.
Mr Khalil, a postgraduate student at Columbia University’s school of international and public affairs, has been a prominent figure in the university’s pro-Palestinian student protest movement.
The 30-year-old has held a US permanent residency green card since 2024 and his wife is a US citizen.
Mahmoud Khalil. Pic: AP
Mr Khalil was detained at his Columbia apartment building in Manhattan on 8 March, as agents from the Department of Homeland Security (DHS) told him his student visa had been revoked.
It marked the first arrest in President Donald Trump’s crackdown on students who joined campus protests against the war in Gaza.
Mr Khalil, who acted as a mediator between protesters and university officials during pro-Palestinian demonstrations at New York’s Columbia University last year, is not accused of breaking any laws.
But the Trump administration says noncitizens who participate in demonstrations like he has should be expelled from the country for expressing views that the administration considers to be antisemitic and “pro-Hamas”.
On Friday, immigration judge Jamee E Comans ruled that the government had the right to deport him, saying its belief that his presence posed “potentially serious foreign policy consequences” was enough to satisfy requirements for his deportation.
Mr Khalil, centre, surrounded by reporters outside the Columbia University campus in April last year. Pic: AP
He said the government had “established by clear and convincing evidence that he is removable”.
Mr Khalil’s lawyers have said they plan to fight the ruling via the Board of Immigration Appeals and can also pursue an asylum case on his behalf.
The judge gave them until 23 April to seek a waiver.
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His lawyer Marc van der Hout said after the ruling: “Today, we saw our worst fears play out: Mahmoud was subject to a charade of due process, a flagrant violation of his right to a fair hearing, and a weaponisation of immigration law to suppress dissent.”
Mr Khalil, who was born in a Palestinian refugee camp in Syria and holds Algerian citizenship, remains in the Louisiana immigration detention centre where federal authorities transferred him after his arrest.
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Jewish protesters against war in Gaza chant ‘Bring Mahmoud home now’
His defence team has said it is seeking a preliminary injunction from the federal court in New Jersey, which would release him from custody and could block the Trump administration from arresting and detaining people for supporting Palestinian people in Gaza.
The Trump administration has been cracking down on pro-Palestinian protesters at universities across the country.
After his arrest last month, the president said: “This is the first arrest of many to come. We know there are more students at Columbia and other universities across the country who have engaged in pro-terrorist, anti-Semitic, anti-American activity, and the Trump administration will not tolerate it.”
There have also been protests over the arrest of Mr Khalil, including by a Jewish group against the war in Gaza who stormed Trump Tower in New York last month.
Local police said 98 were arrested on charges including trespassing, obstruction and resisting arrest.
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