Trump tariff suspension only a ‘fragile pause’, says Macron, as gold soars amid market jitters – business live
Macron says Trump tariff suspension just a ‘fragile pause’
French president Emmanuel Macron has said Donald Trump’s decision this week to suspend tariffs he had imposed on countries gave room for only a “fragile pause”.
“The partial suspension of American tariffs for 90 days sends out a signal and leaves the door open for talks. But this pause is a fragile one,” Macron wrote on X on Friday.
“Fragile, because the 25% tariffs on steel, aluminum and automobiles and the 10% tariffs on all other products are still in place,” he added.
They represent 52 billion euros ($58.8 billion) for the European Union! Fragile, because this 90-day pause means 90 days of uncertainty for all our businesses, on both sides of the Atlantic and beyond.
Reuters also reports that Macron reaffirmed that France and the European Union would present a united front in terms of negotiations aimed at reaching a deal and getting the US tariffs removed.
Key events
UK economy grows by 0.5%…but tariff impact yet to come
Phillip Inman
Breaking news: data this morning shows the UK economy unexpectedly expanded by 0.5% in February, in a boost for Rachel Reeves before an expected downturn triggered by Donald Trump’s tariff war.
Reversing a modest fall in January, the increase in gross domestic product in February could mark the last period of expansion before the threat of a global trade war dampens business investment and consumer spending.
A poll of City economists had expected the economy to grow by 0.1% in February.
This month, consumers face inflation-busting utility bill and council tax increases while employers must cope with £25bn of tax rises.
More details soon …
Summary
In case you’re just joining us, here’s a recap of the latest top lines amid the continuing turmoil in global markets from Donald Trump’s tariffs.
-
Global stocks fell and the US dollar sank further on Friday while an intense bond selloff took hold in a turbulent end to the week of the global tariffs that have fed fears of a deep recession and shaken investor confidence in US assets. The dollar sank to its lowest in 10 years against the Swiss franc and a six-month low against the yen, while the euro surged 1.7% to $1.13855, a level last seen in February 2022.
-
The S&P 500 index ended 3.5% lower on Thursday after getting a brief reprieve when the US president paused duties on dozens of countries for 90 days. Asian markets followed Wall Street on Friday, with Japan’s Nikkei down 4.3%, South Korea falling nearly 1% and Hong Kong stocks heading towards the biggest weekly decline since 2008. Some rose, however, with Taiwan’s main index reversing earlier losses to trade nearly 2% higher and major sectors across India’s Nifty 50 rising in early trading.
-
Gold prices reached a record high amid safe-haven flows. It was last up 1.1% at $3,210 an ounce.
-
Trump’s tariff pause excluded China, with the president dialling up US tariffs on Chinese imports effectively to 145% over Beijing’s move to match his earlier duties. Trump’s escalation of the trade war with China has fuelled fears of recession and further retaliation. Chinese officials have been canvassing other trading partners over the levies, most recently talking to counterparts in Spain, Saudi Arabia and South Africa. Trump expressed hope of a deal with Beijing.
-
China rejected what it called threats and blackmail from Washington and pledged to follow through to the end if the US persists, the commerce ministry said. China’s door was open to dialogue but this must be based on mutual respect, it said. Beijing also restricted imports of Hollywood films, targeting one of the most high-profile American exports.
-
US Treasury secretary Scott Bessent shrugged off the renewed market sell-off and tried to calm nerves by telling a cabinet meeting that more than 75 countries wanted to start trade negotiations.
-
The European Union suspended its retaliatory 25% tariffs on US goods for 90 days after Trump’s turnaround. “We want to give negotiations a chance,” European Commission president Ursula von der Leyen said on X, while also warning that counter-tariffs could be reinstated if negotiations “are not satisfactory”. The EU is still assessing how to respond to US car tariffs and the broader 10% levies that remain in place.
-
The manic US Treasury selloff this week, evoking the Covid-era “dash for cash”, reignited fears of fragility in the world’s biggest bond market. Thirty-year bond yields rose to 4.90%, on course for their biggest weekly jump since at least 1982, LSEG data showed.
-
The US and Vietnam agreed to begin formal trade talks, the White House said, while Japan’s prime minister has set up a task force for the negotiations which hopes to visit Washington next week, according to local media.
– With news agencies
Macron says Trump tariff suspension just a ‘fragile pause’
French president Emmanuel Macron has said Donald Trump’s decision this week to suspend tariffs he had imposed on countries gave room for only a “fragile pause”.
“The partial suspension of American tariffs for 90 days sends out a signal and leaves the door open for talks. But this pause is a fragile one,” Macron wrote on X on Friday.
“Fragile, because the 25% tariffs on steel, aluminum and automobiles and the 10% tariffs on all other products are still in place,” he added.
They represent 52 billion euros ($58.8 billion) for the European Union! Fragile, because this 90-day pause means 90 days of uncertainty for all our businesses, on both sides of the Atlantic and beyond.
Reuters also reports that Macron reaffirmed that France and the European Union would present a united front in terms of negotiations aimed at reaching a deal and getting the US tariffs removed.
More on the Indian stock market’s lift today: all 13 major sectors rose in early trading on the day, with financials and commodity stocks leading the rally.
Heavyweight financials rose 1.8%, aided by an over 2% gains in HDFC Bank and Kotak Mahindra Bank, Reuters reports.
Metal stocks rose 3.6% on weaker dollar and recovered some of its earlier losses following a pause on reciprocal tariffs beyond 10%. The index is still down 2.7% for the week.
Tata Steel, JSW Steel and Hindalco Industries jumped 3.9% to 4.2%, and were among the top four Nifty 50 gainers.
Among individual stocks, Tata Consultancy Services was flat and underperforming both the benchmark and information technology indexes due to its weaker-than-expected fourth quarter earnings.
“With Nifty trading at its more reasonable valuations in nearly three years, there is a compelling case for medium-term upside,” said Manish Goel, founder and managing director of Equentis.
However, volatility will remain elevated at Trump’s tariffs reshape global trade dynamics.
The Indian rupee jumped higher on Friday, tracking gains in Asian peers as the US dollar slumped to a nearly two-year low, with traders expecting volatility to persist.
The rupee rose 0.8% to 86 against the dollar as of 10.15am IST, up from its close at 86.6875 on Wednesday. (Indian financial markets were shut on Thursday for a local holiday.)
The rupee is currently in “the middle of its recent trading range and it could consolidate between 85.70 and 86.70 in the near term”, Reuters quoted a trader at a state-run bank as saying.
Meanwhile, dollar-rupee forward premiums fell, with the 1-year implied yield down 6 basis points at 2.27%, pressured by a decline in the dollar-rupee spot rate and higher US bond yields.
Amy Hawkins
On Thursday morning in Shanghai, as shoppers filled the luxury malls and delivery drivers whizzed around the winding streets at breakneck speed, financiers breathed a cautious sigh of relief.
Overnight, US president Donald Trump had reversed course, announcing a 90-day pause on his so-called “reciprocal tariffs” of up to 50% for dozens of countries. Although China got no such reprieve – instead, the levy on Chinese goods was increased to 145% – the temporary return of normal trade channels showed Chinese businesspeople that all was not lost.
Trump’s announcement of punitive tariffs on countries across south-east Asia had risked closing off the routes that Chinese companies have been using since his first term in office to circumvent his levies.
Since 2017, thanks to tariffs on Chinese goods, the share of China’s exports bound for the US has dropped from about 20% to less than 15%. But much of that trade has simply been re-routed through third countries, as Chinese firms set up shop in places with cheaper labour costs and easier access to the US market.
To read more on how Chinese companies are relieved Trump’s wider tariffs have been paused but on social media the posts are full of defiance, see here:
Jennifer Rankin
The European Union will not rip up its tech rules in an attempt to reach a trade deal with Donald Trump, the bloc’s most senior official on digital policy has said.
Henna Virkkunen, the European Commission vice-president responsible for tech sovereignty, indicated the EU was not going to compromise on its digital rulebook to reach an agreement on trade with the US – a key demand of Trump administration officials.
“We are very committed to our rules when it comes to the digital world,” Virkkunen said in an interview with European newspapers including the Guardian.
We want to make sure that our digital environment in the European Union … that it is fair and it’s safe and it’s also democratic.
She gently pushed back at suggestions that EU digital regulations could be considered trade barriers, saying the same rules applied to all companies whether European, American or Chinese.
In recent days, Trump’s senior trade adviser, Peter Navarro, has claimed the EU was using “lawfare” against the US’s largest tech firms, in a Financial Times article featuring a litany of complaints against supposed “non-tariff weapons”.
You can read our full story here:
Why did Donald Trump backflip on his latest tariffs for most countries except China, despite his insistence for days that his policies wouldn’t change?
In this podcast, Jonathan Freedland speaks to James Bennet of the Economist about who might have forced the US president’s hand, and what could happen next.
India’s benchmark indexes opened higher on Friday, as a US tariff reprieve lifted sentiment, even as global trade uncertainty continues to linger.
The Nifty 50 rose 1.67% to 22,775.2 while the BSE Sensex gained 1.61% to 75,019.41, respectively, as of 09.23am IST, Reuters reports.
Indian markets were closed on Thursday for a local holiday.
China’s yuan slips to 19-month low against trading partners
The yuan rebounded from 2007 lows against a broadly weaker US dollar on Friday but slipped to a 19-month low against currencies of its major trading partners.
However, the People’s Bank of China (PBOC) will not allow sharp yuan declines and has instructed major state-owned lenders to reduce dollar purchases, Reuters reports, citing people with knowledge of the matter.
A weaker yuan would make Chinese exports cheaper and alleviate tariff impact on the economy. But a sharp decline could also increase unwanted capital outflows and risk financial stability, analysts and economists said.
To reflect the broad dollar weakness in global markets, the PBOC lifted its official yuan midpoint guidance fix for the first time in seven days on Friday.
Prior to the market open, the PBOC set the rate – around which the yuan is allowed to trade in a 2% band – at 7.2087 per dollar. That was 5 pips firmer than the previous fix and 1,017 pips firmer than a Reuters’ estimate of 7.3104.
The PBOC has slightly loosened its grip on the currency this week by allowing official guidance to weaken past the key threshold of 7.2 to the dollar. But it came in much stronger than market projections, in what traders and analysts interpreted as an official attempt to keep the yuan steady as the trade row between the world’s two largest economies showed few signs of abating.
Back to Asian markets: across the region they are again deep in negative territory at the end of a highly volatile week.
Tokyo sank more than 4% – a day after surging more than 9% – while Sydney, Seoul, Singapore, Taipei, Wellington, Jakarta and Manila were also in the red, Agence France-Presse reports.
Ho Chi Minh City stocks rallied, however, after Vietnam said it would hold talks with Donald Trump.
Hong Kong also dropped but Shanghai fluctuated as traders focused on possible Chinese stimulus measures instead of the fact that the country was now facing US duties of up to 145%.
Beijing said on Friday it would implement a moderately loose monetary policy in a bid to reassure investors.
The losses followed a similar story on Wall Street, where the S&P 500 lost 3.5%, the Dow 2.5% and the Nasdaq 4.3%. That ate into the previous day’s gains of 9.5%, 7.9% and 12.2%.
More now on the announcement of Xi Jinping’s first offical foreign trip this year, with the Chinese leader set to visit Vietnam, Malaysia and Cambodia from this Monday to Friday.
Xi’s visit to Vietnam comes on the invitation of President Luong Cuong, Beijing said. He last visited the country in December 2023.
Vietnam has long pursued a “bamboo diplomacy” approach, striving to stay on good terms with both China and the US, Agence France-Presse reports. Hanoi shares US concerns about Beijing’s increasing assertiveness in the contested South China Sea but it also has close economic ties with China.
Xi’s visit to Malaysia will take place from 15-17 April, the country’s government said this week. The communications minister, Fahmi Fadzil, said Xi’s visit was “part of the government’s efforts … to see better trade relations with various countries including China”.
Xi will travel on Thursday to Cambodia, one of China’s staunchest allies in south-east Asia and where Beijing has extended its influence in recent years, before wrapping up the trip on Friday.
Under former leader Hun Sen – prime minister Hun Manet’s father – China poured billions of dollars into infrastructure investments, while Washington’s relationship with Phnom Penh deteriorated.
Cambodia described it as a “milestone visit which will further cement the traditional relations of friendship built by successive leaders of both countries”.
Xi’s visit to the region comes as Beijing squares off with the US in an escalating trade war triggered by President Donald Trump, with many Chinese exports now facing 145% tariffs on arrival in the US.
The Australian and New Zealand dollars were looking to end a wild week with sizeable gains on a crumbling US dollar as the damage done to investor confidence by the chaos over tariffs sparked an exodus from US assets.
The gains for the Aussie were all the more startling as it is usually the market’s whipping boy during times of volatility and stress, Reuters reports. Yet this time it was the US dollar being dumped.
President Donald Trump eased back on tariffs for most countries except China on Wednesday in part to stem a sell-off in Treasuries, yet bond yields were rising again on Friday. Yields on US 30-year bonds were heading for their largest weekly increase since 1982.
Indeed, US 10-year yields started the week 19 basis points below those in Australia, but have now swung to paying 10 basis points more, and still the US dollar fell.
The Aussie was last at $0.6219, having rallied from a five-year trough of $0.5910 early in the week. That left it with a gain of 3.1% for the week, the largest since late 2022.
The kiwi dollar was up at $0.5775, which if held would give it a weekly rise of 3.2%. That was a marked turnaround from a five-year low of $0.5483 hit early in the week, and came despite a cut in local interest rates.
Neither currency fared as well against the major safe havens, however, losing ground to the yen, euro and Swiss franc, in part reflecting the darkening outlook for global growth and resource demand.
Xi to make regional visits next week
Xi Jinping will visit Vietnam, Malaysia and Cambodia beginning on Monday, state-run media is reporting.
The Chinese president’s trip would run from 14-18 April, Xinhua news agency said on Friday.
While American consumers and markets wonder and worry about Donald Trump’s on-again, off-again tariffs, there’s one group cheering him as they hope he’ll prop up their sinking business: Gulf coast shrimpers.
The Associated Press reports that American shrimpers have been hammered in recent years by cheap imports flooding the US market and restaurants, driving down prices to the point that profits are razor thin or shrimpers are losing money and struggling to stay afloat.
Tariffs, they hope, could level the playing field and help their businesses not just survive but thrive.
“It’s been tough the last several years that we’ve tried to fight through this,” said Reed Bowers, owner of Bowers Shrimp Farm in Palacios, Texas. Tough times meant difficult choices for many.
Cutting people off, laying people off, or reduce hours or reduce wages … whatever we can do to survive.
Since 2021, the price of imported shrimp has dropped by more than $1.5bn, according to the Southern Shrimpers Alliance trade association, causing the US shrimp industry to lose nearly 50% of its market value. More than 90% of the shrimp consumed in the US is imported, it says.
