Donald Trump: now is “great time to move your company” to the US
Donald Trump has claimed that it is a “great time to move your company” to the US, with global stock markets reeling because of the president’s trade war.
Trump imposed a 104% tariff on China, which has responded with an 84% tariff in retaliation. That has deepened concerns that the trade war will trigger a global recession.
However, Trump has argued that the tariffs are a necessary tool to revive US manufacturing. On Wednesday morning he claimed that “record numbers” of companies are moving back to the US, despite the turmoil.
On his social network, Truth Social, he wrote:
This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing. ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!
Stock markets have suggested that investors are less impressed, with markets expected to fall for a fifth consecutive day on Wednesday.
Key events
Donald Trump bragged about countries “kissing my ass” to negotiate tariffs during a dinner for Republicans on Tuesday.
The US president said:
We’re going to do much better than that this time, because this time I’m doing what I want to do with respect to the tariffs.
He added that Congress should not get involved in the negotiations because “they don’t negotiate like I negotiate”.
Oil price slump means Russian price cap is ‘meaningless’
Jillian Ambrose
The Kremlin can effectively shrug off the G7’s price cap on Russian oil exports after the global benchmark price slumped below $60 a barrel.
The $60 cap on Russian oil exports was put in place in late 2022 – when oil traded at well over $100 a barrel – to limit the oil revenues that Moscow could put towards its war efforts in Ukraine without inflating oil market prices further by banning their exports altogether.
It effectively barred all G7 and EU nations from purchasing Russian barrels above $60 – or providing shipping, insurance, brokering, trade finance, and other support services for any deals done above the cap.
Russia was able to bypass the cap through a series of loopholes including the use of a shadow fleet of aging oil tankers to carry cargoes at the usual market rates. Experts believe it may still have cost the Kremlin around €34bn in export revenues in its first year, or roughly two months worth of earnings.
But the aggressive sell-off in the oil market over the past week over fears of a global economic recession has meant the cap is “currently meaningless”.
Clayton Seigle, a senior fellow the Center for Strategic and International Studies (CSIS) in Washington DC, told the Guardian that the G7 could now considering “tightening the screws” on the Kremlin by lowering the cap.
I personally would be in favour of lowering the cap even further. There might be a willingness within the G7 to do this to punish Moscow, especially because there are no real fears about leaving the market under-supplied.
But it’s a political decision.
The UK government was approached for comment.
While share prices on Wall Street appear to be taking a breather after four days of selling, investors are clearly asking themselves if it is worth owning US assets at all.
George Saravelos, head of foreign exchange research at Deutsche Bank, wrote in a note to clients today that he feared that disorderly markets could eventually force the Federal Reserve to step in.
He wrote:
We are witnessing a simultaneous collapse in the price of all US assets including equities, the dollar versus alternative reserve FX and the bond market. We are entering uncharted territory in the global financial system.
Saravelos argued that Trump’s hopes of reducing bilateral trade deficits are “functionally equivalent to lowering demand for US assets as well”.
He also noted that the next stage of escalation with China will be key. There could be serious problems if the US tries to use its financial power against China. Saravelos wrote:
With a 100%+ tariff on China, there is little room now left for an escalation on the trade front. The next phase risks being an outright financial war involving Chinese ownership of US assets, both on the official and private sector front. It is important to note there can be no winner to such a war: it will damage both the owner (China) and the producer (US) of those assets. The loser will be the global economy.
The Federal Reserve could cushion some of the blow, he argued, but in the end only one thing can properly stabilise markets: “a reversal in the policies of the Trump administration itself”.
Donald Trump is clearly watching the stock market closely this morning in the US.
On Truth Social, the platform he owns, he wrote:
BE COOL! Everything is going to work out well. The USA will be bigger and better than ever before!
And that was followed by:
THIS IS A GREAT TIME TO BUY!!! DJT
It appears that some investors agree, as the selling pressure has eased on stock indices. The FTSE 100 is now down 2.1% – still a fairly painful move over a single day, but less remarkable.
Oil prices have recovered somewhat, with Brent crude futures back above $60 per barrel.
In the space of a few minutes the US markets have turned around: the S&P 500 is now up by 0.4%.
The Dow Jones industrial average – a less useful gauge – is still down by 0.3%. And to round off the mixed bag, the Nasdaq is up by 1%.
US stock markets drop after Chinese tariff retaliation
US share prices fell further on Wednesday after China’s retaliation to Donald Trump’s tariffs deepened fears of a global recession.
The S&P 500, the Wall Street benchmark stock index, dropped by 0.4%, while the historic Dow Jones industrial average fell 0.7%.
However, the early downward moves were less marked than those of European or Asian markets. The tech-focused Nasdaq index actually gained 0.18% at the market open.
The FTSE 100 was still down by 2.9% on Monday afternoon, with less than two hours of trading left. The European Stoxx 600 index fell by 3.6%.
Kalyeena Makortoff
The UK’s largest investment site, Hargreaves Lansdown, says trading on its platform hit record levels this week as retail investors reacted to the tariff turmoil.
Hargreaves said Monday was the “busiest ever day” for the HL platform, both in terms of trade and the amount of money flowing through the site, with spiralling prices had actually encouraged more customers to buy stocks while they were cheap.
Around 63% of trades were put towards buying rather than selling stock on Monday, with that proportion jumping to 80% during Tuesday’s trading session.
But the level of uncertainty in the run-up to Trump’s so-called liberation day has bolstered safe havens such as gold, with net purchases of gold exchange traded funds having surged by 157% last week compared to a week earlier.
There has also been a surge in interest in owning gilts, particularly since Thursday.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said:
History has shown time and again that markets reward those who keep a cool head and think with a long-term horizon.
Drip feeding investments and buying when markets fall can help ride out the volatility. It means investors may be able to take advantage of lower prices and benefit during a recovery.
This can help smooth out sharp market movements over the longer-term. Most investors will be best placed to sit tight and ride out the rollercoaster.’
Donald Trump: now is “great time to move your company” to the US
Donald Trump has claimed that it is a “great time to move your company” to the US, with global stock markets reeling because of the president’s trade war.
Trump imposed a 104% tariff on China, which has responded with an 84% tariff in retaliation. That has deepened concerns that the trade war will trigger a global recession.
However, Trump has argued that the tariffs are a necessary tool to revive US manufacturing. On Wednesday morning he claimed that “record numbers” of companies are moving back to the US, despite the turmoil.
On his social network, Truth Social, he wrote:
This is a GREAT time to move your COMPANY into the United States of America, like Apple, and so many others, in record numbers, are doing. ZERO TARIFFS, and almost immediate Electrical/Energy hook ups and approvals. No Environmental Delays. DON’T WAIT, DO IT NOW!
Stock markets have suggested that investors are less impressed, with markets expected to fall for a fifth consecutive day on Wednesday.
EU to impose retaliation to US metals tariffs on 15 April
Jakub Krupa
The European Commission has confirmed it secured the necessary support to impose trade countermeasures against the US, retaliating for its steel and aluminium tariffs.
The commission’s statement says that “the EU considers US tariffs unjustified and damaging, causing economic harm to both sides, as well as the global economy.”
“The EU has stated its clear preference to find negotiated outcomes with the US, which would be balanced and mutually beneficial,” it added.
But it adds that the countermeasures will soon enter into force, once final checks are conmpleted, with duties set to be collected from Tuesday, 15 April.
“These countermeasures can be suspended at any time, should the US agree to a fair and balanced negotiated outcome,” it added.
US Treasury secretary Scott Bessent has been sent out this morning to try to calm financial market nerves. He said he expects the bond market to calm down.
He told Fox News that China’s retaliation was “unfortunate”, and would make them lose out.
Bessent also said that China should not try to devalue its currency to absorb some of the hit from tariffs. That came after the yuan traded onshore ended the Chinese day at its weakest level in more than 17 years, after its offshore counterpart fell to a record low overnight.
In separate remarks this morning to the American Bankers’ Association, Bessent said that the economy was in pretty good shape and very solid, despite a “little uncertainty”.
The US east coast is just about getting to work, and it appears that traders are not too pleased with what they see. The US government debt sell-off has regained momentum after China’s tariff retaliation.
The US 10-year yield, the benchmark of government borrowing costs, is back up at 4.45% – still short of the spike to 4.5% overnight, but not far off. (Bond yields move inversely to prices, so rising yields indicate that investors are selling the debt.)
The 10-year yield was significantly higher as recently as January, but what investors and central bankers will be watching in particular are any signs of disorderly trading. So far, there have been tremors, but not a sign of the financial earthquake that might need intervention from the US Federal Reserve.
But in London, the Bank of England and the UK government will be nervously watching the progress of British borrowing costs.
The cost of borrowing over 30 years has risen particularly steeply. The 30-year yield hit a high of 5.649% on Wednesday afternoon, its highest level since 1998. It was last at 5.622%, up 0.28 percentage points during the day – a noteworthy move for government debt.
There was also a notable move on the UK 10-year gilt, the benchmark for government borrowing costs (named after the gilt edges that used to adorn bond certificates). The 10-year gilt yield rose by 0.16 percentage points on Wednesday to 4.765%, its highest in a fortnight.
The FTSE 100 sell-off has accelerated: it is now down by 3.7%.
97 out of 100 FTSE 100 companies are down for the day, with pharma companies AstraZeneca and GSK the biggest fallers, both down more than 7%.
Oil company BP is down 6.5%.
Trainer retailer JD Sports, which today announced a very positive outlook, is the only company that has risen by more than 1% – it has gained 7.7%.
Trading in US stock market futures has been fairly choppy today, but after China’s retaliation it looks like selling on Wall Street is likely to resume on Wednesday.
The futures suggest that the S&P 500 is now on course for a 1.6% decline, the Nasdaq is set for a 1.3% drop, and the Dow Jones industrial average is set to drop 1.7%.
For comparison, at 9:44am BST the respective futures moves were -0.5% for the S&P 500, -0.2% for the Nasdaq, and -0.7% for the Dow Jones industrial average.
US borrowing costs have risen in the wake of China’s tariff retaliation.
The yield on the benchmark 10-year US Treasury rose above 4.42% ahead of New York’s markets opening, up 0.12 percentage points over the course of the day – although short of the peak above 4.51% earlier on Wednesday. Bond yields move inversely to prices, so rising yields indicate selling.
The yield on the US 30-year Treasury also rose above 4.9%, although that was also short of the heights of 5.02% earlier.
It is not just stock markets that have been rocked by China’s retailiation to Donald Trump’s tariffs: oil prices immediately plunged further.
Brent crude oil futures prices dropped as low as $58.47, as shown in the below chart. Bear in mind that this was the first time that a barrel had cost less than $60 since February 2021.
That has left Brent crude prices down by 5.1% today, while the price of West Texas Intermediate is down 5.4% to $56.37.
