Trump rattles markets in trade tantrum and warns he'll use tariffs in 'much more powerful and obnoxious way'
Stock markets and bitcoin fell yesterday and gold rallied as Donald Trump ramped up his trade war with a threat to use tariffs ‘in a much more powerful and obnoxious way’.The FTSE 100 – at one point on course for a record close above 10,700, having gained more than 50 points – ended the session down 0.02 per cent at 10,684.74.There were heavier losses elsewhere, with the main German benchmark down 1.1 per cent in Frankfurt, while on Wall Street the Nasdaq 100 slid 1.2 per cent, the S&P 500 lost 1 per cent, and Dow Jones Industrial Average fell 1.7 per cent.At the same time, bitcoin crashed below $65,000, and is down nearly 26 per cent this year, and has all but halved since peaking above $126,000 just four months ago.Precious metals rallied, however, with gold rising back above $5,200 an ounce, while silver headed towards $90.Although bullion is still below last month’s peak of about $5,600, it is still up 20 per cent this year. Trade war: US president Donald Trump has imposed a new 15% tariff on US imports, following the Supreme Court ruled his previous trade policies were unlawfulThe latest swings on financial markets came after Trump imposed a new 15 per cent tariff on US imports, after the Supreme Court ruled his previous trade policies were unlawful.‘Uncertainty is back,’ said Carsten Brzeski, global head of macro at Dutch bank ING.Having outlined his plan for a new round of tariffs, the US President then took to social media to threaten America’s trading partners.‘Any country that wants to play games with the ridiculous Supreme Court decision, especially those that have ripped off the USA for years, and even decades, will be met with a much higher tariff, and worse, than that which they just recently agreed to,’ he wrote.He added that the court’s decision affirmed his ability to use tariffs under other laws ‘in a much more powerful and obnoxious way’.America’s allies are now scrambling to work out what the new tariffs mean, with the UK pointing to last year’s trade deal that saw the levy on many British goods set at 10 per cent. Downing Street warned it could retaliate if Trump reneges on the deal.‘Nothing is off the table at this stage,’ said a spokesman for Prime Minister Keir Starmer, before adding: ‘Industry doesn’t want to see a trade war.’Bank of England official Alan Taylor warned higher US tariffs appear to be here to stay, with the full impact taking ‘many years’ to be felt.‘I think the fundamental thing to realise is those tariffs are here to stay at some kind of number that is a lot – an order of magnitude – bigger than it was two years ago,’ said Taylor, a member of the Bank’s interest-rate setting Monetary Policy Committee. ‘So I think we should expect this shock to play out also over many years.’Danni Hewson, head of financial analysis at investment platform AJ Bell, said: ‘Investors have come to expect chopping and changing from the current US president, but the present tariff turmoil makes charting the course ahead even more impossible than it already was, which makes it no surprise that the safe-haven allure of gold has been back in play.’DIY INVESTING PLATFORMSAJ BellAJ BellEasy investing and ready-made portfoliosHargreaves LansdownHargreaves LansdownFree fund dealing and investment ideasinteractive investorinteractive investorFlat-fee investing from £4.99 per monthFreetradeFreetradeInvesting Isa now free on basic planTrading 212Trading 212Free share dealing and no account feeAffiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.Compare the best investing account for you
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Trump rattles markets in trade tantrum and warns he'll use tariffs in 'much more powerful and obnoxious way'
