Main Points
- EU trade ministers are meeting to devise its response to the 20 per cent US tariffs on goods from the bloc
- European stock markets plunged in early trading, following stock market falls across Asia overnight
- Israeli prime minister Binyamin Netanyahu will meet Donald Trump today, which will give world leaders a sense of how willing the US president is to move on tariffs
- Declines in cryptocurrencies have seen almost all the gains since Trump’s election win wiped out
- Ireland is exploring ways to ramp up assistance to businesses seeking to diversify their export markets
- US commerce secretary Howard Lutnick has said the 10% ‘baseline’ tariff on all imports will ‘stay in place for days and weeks’
Key reads
Media and tech won’t escape fallout from Trump’s tariffs
The three key issues the Irish Government now faces
British Prime Minister Keir Starmer has described the tariffs situation as “the great challenge of our age,” while visiting a Jaguar Land Rover plant on Monday afternoon.
“This is a moment for cool heads, nobody wins from a trade war, you know that,” he said.
“But it’s also a moment for urgency, because we’ve got to rise together as a nation to the great challenge of our age – and it is the great challenge – which is to renew Britain so we’re secure in this era of global instability.
“Let me be really clear, at a moment like this, our future is in our hands, and so of course, we will keep calm and fight for the best deal with the US, and we’ve been discussing that intensely over the last few days.
“But we are also going to work with our key partners to reduce barriers to trade across the globe, to accelerate trade deals with the rest of the world, and champion the cause of free and open trade right across the globe.”
Jaguar Land Rover said over the weekend it would pause all shipments to the US in the wake of the announcement there on Thursday of 25 per cent tariff on car imports. The company said it needed to work on its response to the move.
A sign of the madness we are living through is the jump and then reversal in US markets this afternoon, writes Cliff Taylor.
Markets jumped a bit after 3pm when there was speculation – reported on financial news channel CNBC and elsewhere – that President Donald Trump was considering a 90-day pause on the imposition of tariffs to allow room for negotiation.
US markets jumped into positive territory, but subsequently reversed when a White House source responded saying no-one there had heard about it. It was then dismissed as “ fake news” .
By a little after 3.30pm they were back in the red. Who knows where share prices will be a bit later.
With Trump writing on Truth Social that “President Trump is not going to bend” , it seems that he is indeed going to hold to his course for now.
Bill Ackman, the billionaire fund manager and Trump supporter, had called for the 90 day pause in the implementation of tariffs earlier, saying the president was losing the support of business leaders.
After the brief excitement, stocks are again heading downwards. Expect a lot more of this in the days ahead.
CNBC are quoting White House officials as describing reports of a 90-day pause to tariffs as “fake news” according to Reuters.
More to follow…
Trump is apparently considering a 90-day pause on the tariffs, something that has caused US markets to rebound somewhat.
National Economic Council director Kevin Hassett said Trump is considering the three-month delay, CNBC is reporting, but this has not been confirmed.
EU trade commissioner Maroš Šefčovič said starting “meaningful negotiations” with the US administration remains his main focus, Jack Power reports from Luxembourg.
Speaking at a press conference after a meeting of EU trade ministers, Sefcovic said the 27-state bloc would not “wait endlessly” for talks to start, before it acted.
Sefcovic, who is leading the European Commission’s response to US tariffs, said it would pursue trade deals with other countries, like India, Thailand and the Gulf region.
EU states were preparing to vote on a “robust” package of retaliatory tariffs on US goods this week, he said.
“While the US has decided to step back from parts of the global trading system, the system is still crucial for the EU and the rest of the world,” he said.
There was a “strong perception of unity” in the room when EU ministers met on Monday, he said.
Beyond the initial package of counter-tariffs, the EU would be considering “additional steps” it could take, in response to Trump’s across-the-board tariffs, he said.
At the press conference, Sefcovic gave some further details about a deal the EU previously put on the table, to try to avert US tariffs in recent weeks.
Sefcovic said the commission proposed both sides drop tariffs on industrial goods to zero.
This would have seen both the EU and US reduce any existing tariffs on the trade of pharma, plastics, rubber, chemicals and automobiles trade to zero. These would be tariffs that applied before Trump began his second term in the White House.
Sefcovic said he first made the offer to US commerce secretary Howard Lutnick in February this year.
He said the commission had made it clear to the US that it would not change its system of charging Value Added Tax on goods, something Trump has likened to a tariff on US trade.
UK Prime Minister Keir Starmer said Britain will fight to secure a trade deal with the US while working with key partners around the world to lower trade barriers.
He also said Britain will back its car manufacturers “to the hilt” after Trump imposed a 25 per cent tariff on auto imports.
Starmer told a press conference on Monday that the levies are a “huge challenge for our future, and the global economic consequences could be profound”.
“We will keep calm and fight for the best deal with the U.S., and we’ve been discussing that intensely over the last few days,” he told workers at a factory in Britain.
“But we are also going to work with our key partners to reduce barriers to trade across the globe, trade deals for the rest of the world, and champion the cause of free and open trade right across the globe.”
– Reuters
‘Worst possible outcome is global nuclear arms race,’ CEO of JPMorganChase says
A letter from Jamie Dimon, Chairman and CEO at JPMorganChase, to shareholders is going viral today.
He writes: “Whatever you think of the legitimate reasons for the newly announced tariffs – and, of course, there are some – or the long-term effect, good or bad, there are likely to be important short-term effects. As for the short-term, we are likely to see inflationary outcomes, not only on imported goods but on domestic prices, as input costs rise and demand increases on domestic products. How this plays out on different products will partially depend on their substitutability and price elasticity. Whether or not the menu of tariffs causes a recession remains in question, but it will slow down growth.”
Mr Dimon adds that the worst possible outcome of the current situation is “a global nuclear arms race”.
“We face the most perilous and complicated geopolitical and economic environment since World War II. Today’s world is more complex and more interconnected than ever before. Comprehensive strategies, diligently deployed, are required to address challenges on many fronts: the war in Ukraine; terrorism in the Middle East and the real possibility that Iran may develop a nuclear weapon; Europe’s potential fragmentation; and ongoing trade disputes and the rise of China. If Iran acquires a nuclear weapon, many other nations around the world will seek to acquire nuclear weapons, presenting us with a catastrophic situation. A global nuclear arms race is the worst outcome that could happen to our world – and this may be the greatest threat to mankind’s survival. Lastly, it is extremely important to recognise that security and economics are interconnected – “economic” warfare has caused military warfare in the past.”
The Department of Finance has delayed the publication of its Spring economic statement as the fallout from US tariffs clouds the outlook.
The department had been scheduled to publish its Annual Performance Report this week, but this has now been deferred until the end of the month because of the uncertainty posed by US tariffs.
A spokesman confirmed the document will “be published in the coming weeks”.
Read the full story here.
‘We have to consider how we support Irish businesses’, Simon Harris says
Speaking after the meeting of EU trade ministers in Luxembourg, Tánaiste and Minister for Foreign Affairs and Trade Simon Harris said: “We have to consider how we support European businesses … how we support Irish businesses through this difficult time.
“That will ultimately have to be part of the European response, but we’re not at that moment yet.”
European Commission president Ursula von der Leyen says US tariffs are having a “massive impact” on the global economy.
Speaking at a press conference in Brussels, she said that an offer had previously been made that would have seen the US and the EU both agree to drop all existing tariffs on imports of industrial goods. The EU currently charges import levies of 10 per cent on cars sold from the US.
The proposal from the EU had been made “long before” the current wave of tariffs Trump has levied on trade from the EU and most of the rest of the world, she said. Last month Trump introduced tariffs of 25 per cent on all imports of foreign-made cars.
Dr von der Leyen said there was “not an adequate reaction” to the EU’s previous suggestion both sides reduce tariffs on automobile imports to zero.
“It’s very clear that we are open for negotiations and that in parallel we are preparing a potential list for retaliation and other measures for retaliation,” she said.
Dr von der Leyen reiterated that “all” available instruments remained on the table, in how the EU decided to respond to the US tariffs. “We have to see how the negotiations go,” she said.
Seventy-five per cent of goods exported by Ireland to the United States have been exempted from the tariffs imposed by President Trump so far, according to a new briefing paper from the Parliamentary Budget Office (PBO).
However, Emmet Malone reports that this would drop to just 2 per cent if pharmaceuticals and chemicals are targeted over the coming weeks.
The corresponding figures for Europe are 31 per cent and 5 per cent respectively.
The scale of the reduction highlights the ongoing risk to the Irish economy as the EU prepares to announce a round of tariffs on selected imports from the US.
The PBO document says Ireland exported goods worth €72.6bn to the United States last year, almost €51bn more than the value of good moving in the opposite direction.
The export figure represents 32 per cent of all Irish exports and while the total for the EU combined is larger, the figure is the biggest for a single country.
The EU country with the next highest proportion of its total exported goods going to the US is Italy, where the figure is 10 per cent.
In Ireland’s case, medical and pharmaceutical products make up 61 per cent of the value of the exported goods involved and 44 per cent of such goods exported from Ireland are destined for the US.
The PBO provides papers intended to inform members of the Oireachtas on policy issues. Its new briefing paper highlights the rapid growth in the value of exports to the US with the figure for last year 3.5 times what it had been in 2014. The corresponding figure for all other countries roughly doubled.
The paper looks at the impact of a previous round of tariffs on steel as an example of the impact such measures can have on trade.
It says a 25 per cent tariff imposed on steel imports in 2018 reduced exports of steel from the EU to the US by an average of 19 per cent and these subsequently went up by 59 per cent after the tariffs were dropped in 2021.
‘Everyone knew a tariff announcement was on the way, but it was harsher than expected’
Cliff Taylor writes: How come share prices are taking such as hit across the world? Did investors not see Trump’s tariffs coming? Well, they did. And they didn’t. Everyone knew a tariff announcement was on the way. But it was at the harsher end of expectations, particularly in relation to many Asian countries. Also, the tariffs are being imposed very quickly, clearly leaving no room for immediate negotiation. And Trump and his people have been sending out a hard-core message that tariffs are, in most part, hear to stay, with all the economic cost that entails, while also – confusingly – hinting that they may be open for negotiations but only if the price is right. Trump said that 50 countries had contacted the US looking to do deals. This seems highly unlikely, but we may see more of this over the next 24 hours.
The markets appeared to have been betting on a short-sharp tariff announcement which could be largely negotiated away. Now something different is in prospect. China’s retaliation, imposing tariffs of 34 per cent on US imports, drove this home. Now investment banks are calculating suddenly upping the risk of a US recession – Goldman Sachs call it at a 45 per cent risk – and the growth outlook elsewhere is also worsening. Some of Trump’s big Wall St backers now appear to have some buyers’ remorse, warning about the damage this will entail.
From a markets point of view, there are dangers of this getting worse, unless Trump relents. Investment funds will now be seeing demands from clients to sell – and in some cases this will put them under financial pressures, while hedge funds will face margin funds from financiers. If longer-term investors really take fright, there will be more to come and the risk of some pressure and problems appearing across the US financial system, especially if steady selling turns to panic.
The question now is whether this will cause Trump to change course. Some 60 per cent of the US population hold shares, many in so-called “401’s” for their pensions. Big investors are also losing heavily. Some big investors are calling on Trump to delay the implementation of the next batch of tariffs (the balance above the 10 per cent imposed over the weekend) to allow time for talks to other countries. So far, Trump is not for turning. But if this continues much longer the pressure on him is only going to grow.
Goldman Sachs has raised the odds of a US recession to 45% – up from 35% – the second time it has increased its forecast in a week amid a growing chorus of such predictions by investment banks due to an escalating trade war.
– Reuters
Ursula von der Leyen, President of the European Commission, says the EU is ready to negotiate with the US on tariffs.
“We are ready for a good deal but ready to take counter measures,” she said at a press conference on Monday.
“We will focus like a laser beam on the 83 per cent of global trade that is beyond the US.”
Bloomberg has calculated that around $9.5 trillion has been wiped off global share prices since the US president announced the new tariffs.
Final list of US products targeted by EU import duties may not be published this evening
Some more details from Europe Correspondent Jack Power on the EU’s package of retaliatory tariffs the bloc is planning to put on US goods.
It had been expected that a final list of US products targeted by import duties would be published on Monday evening, ahead of EU states voting to adopt the counter-tariffs on US trade on Wednesday.
It now seems the list of products will not be published before the vote.
That means Irish whiskey distillers and exporters will have to wait until the middle of the week to find out for sure if bourbon was removed from the US products to be hit with EU tariffs, as we reported it likely has been.
Whiskey exporters had been lobbying for bourbon to be spared from EU tariffs, due to fears Trump would respond with even higher tariffs on European spirits and wine.
Donald Trump has delivered a defiant defence of the economic situation, posting this on his Truth Social account:
Oil prices are down, interest rates are down (the slow moving Fed should cut rates!), food prices are down, there is NO INFLATION, and the long time abused USA is bringing in Billions of Dollars a week from the abusing countries on Tariffs that are already in place.
This is despite the fact that the biggest abuser of them all, China, whose markets are crashing, just raised its Tariffs by 34%, on top of its long term ridiculously high Tariffs (Plus!), not acknowledging my warning for abusing countries not to retaliate. They’ve made enough, for decades, taking advantage of the Good OL’ USA!
Our past “leaders” are to blame for allowing this, and so much else, to happen to our Country. MAKE AMERICA GREAT AGAIN!
EU countermeasures must be ‘strategic’ says Taoiseach, warning of stock market ‘carnage’ without talks
Taoiseach Micheál Martin said on Monday “I believe we should engage with the US” on its tariffs plan.
“The EU should clearly, I think, be transparent in terms of what could happen. In other words, the [European] Commission will, in all likelihood, produce a list of potential countermeasures.
“They must be designed strategically and, in so far as is possible, not bring more damage on to the European economy. But the only way to ease the carnage on the stock markets is for a negotiated pathway between the US and the EU.”
Speaking at an Enterprise Ireland New Frontiers event at the Munster Technological University, Mr Martin said: “Basically I am saying … the EU can respond and will respond. But ultimately a trade and tariff war would damage everybody – already the world economy is being damaged. Already investments are being paused so it is not good for the world economy.”
US tariff calculations were ‘nonsense’, German economy minister says
The calculations the US had used to set differing tariff rates it announced last week are “nonsense”, German economy minister Robert Habeck says.
Any EU state who broke from the bloc of 27 and tried to cut a deal on its own with the US would not be successful, he said in Luxembourg today, Jack Power reports.
Laurent St-Martin, French minister delegate for foreign trade, said the EU must react “firmly and proportionally”. The union needed to remain united in its response, he said.
“We are against any trade war, any trade war, neither with the United States, with any other country. We always prefer co-operation to confrontation. Our end goal remains the same, to negotiate, de-escalate,” he said.
European trade commissioner, Maroš Šefčovič, who is the commission’s point person on tariffs, said Europe was trying to get to grips with a “paradigm shift of [the] global trading system”. EU ministers would debate the bloc’s “next move” in response to the US tariffs, he said.
There will be “no winners” in the escalating trade row, said Michal Baranowski, Polish undersecretary of state for economic development.
“It’s very much hitting Americans but it’s also hurting Europeans and other countries across the globe,” he said. The EU should not copy the US approach of “shoot first, talk later” on tariffs, he said.
The meeting of EU trade ministers in Luxembourg is not expected to agree to take any decisions. Instead the discussion on Monday is largely about trying to get EU states on the same page, about how the bloc should respond to Trump’s tariffs.
The stampede from global equities is gathering momentum as the fallout from Trump’s tariffs deepen.
Here’s a round-up of what’s happened so far today:
European stocks tumbled more than 5 per cent this morning, sinking further into correction territory.
Stocks tumbled from Tokyo to Mumbai, sending a gauge of Asian shares lower by almost 8 per cent, the worst intraday drop in more than 16 years. An index of emerging-market equities plunged the most since the global financial crisis.
US equity-index futures indicated Wall Street is in for another steep decline following the carnage last week. The 10-year Treasury yield fell to a six-month low, while traditional haven currencies like the yen and Swiss franc surged.
From Bill Ackman to Stanley Druckenmiller, investors have condemned Trump’s decision to launch expansive global tariffs in an attempt to reshape global trade in Washington’s favour.
Federal Reserve Chair Jerome Powell made clear that the central bank won’t rush to react to the tariffs, which are likely to have a significant effect on the US economy, including slower growth and higher inflation.
Investors should be prepared for the S&P 500 to drop a further 7 per cent to 8 per cent if tariff angst doesn’t subside and the Fed remains on hold, according to strategists at Morgan Stanley led by Michael Wilson.
– Bloomberg
The “very aggressive and arbitrary” US tariffs need a united EU response, French minister Laurent St-Martin has said.
The French minister delegate for trade has criticised the “very aggressive and arbitrary” trade measures adopted by Trump as he says France “prefers co-operation to confrontation”.
Speaking in Luxembourg ahead of the meeting of EU trade ministers, he said: “Our end goal remains the same, to negotiate this escalation and negotiate back to where things were, and if it’s not possible, of course, European Union must react, must react firmly and must react proportionately.”
He also stressed the need for Europe to remain united.
Israeli prime minister Binyamin Netanyahu’s meeting with Donald Trump will give world leaders a sense of how willing the US president is to budge on tariffs.
Netanyahu made a sudden visit to Washington on Sunday and immediately went to see US Commerce Secretary Howard Lutnick. The prime minister gave few details, beyond saying their talks were productive, Bloomberg reports.
He’ll meet Trump later on Monday. While Netanyahu wants to discuss Iran and the war in Gaza, he’s made clear that getting a better deal on tariffs is key.
Israeli officials were shocked when Trump unveiled a 17 per cent levy on the country’s goods last week. That made Israel one of the hardest-hit nations in the Middle East, despite Netanyahu’s closeness to Trump and it being the US’s main ally in the region. The move also came after Israel had said, just a day earlier, it would cancel customs duties on American products.
Netanyahu said he would talk to Trump about “the tariff regime that has been imposed on Israel”.
“I hope that I will be able to help on this issue,” he said, describing it as “so important to the Israeli economy.”
Israeli assets – like those around the world – are coming under pressure. The shekel is heading for its worst two-day performance since just after Hamas’ attack in October 2023. The government’s credit-default swaps – a gauge of a country’s risk premium – have surged to their highest level in several months.
It’s unclear what Netanyahu can offer Trump. The White House has shown few signs of flexibility with any country, despite more than 50 calling the administration seeking negotiations, according to US Treasury Secretary Scott Bessent.
Israel’s main problem is its trade surplus with the US. At $7.4 billion last year, it’s the biggest any Middle Eastern nation has with America and is even larger if Israel’s tech-software exports are included.
“This is not a negotiation, this is a national emergency based on a trade deficit that’s got out of control,” White House trade czar Peter Navarro said to Fox News on Sunday, referring to US deficits in general. Still, he said, “we’re always willing to listen.”
The possible need for the State to support sectors hardest hit by US tariffs is something the Government is keeping “under review”, Simon Harris said.
Coalition sources in recent days rejected any suggestion of a return to massive business support schemes like those seen during the Covid-19 pandemic.
Speaking in Luxembourg to our Europe Correspondent Jack Power, the Tánaiste seemed to leave the door open to the possibility of targeted State supports to impacted industries.
“If there’s a need to support individual sectors as we go through this global financial challenge and the economic turmoil that president Trump’s announcements have caused, Ireland certainly will always keep that under review,” he said.
“There’s an awful lot we can do in terms of controlling what we can control at a European level, that would directly support European industry, European jobs and the European economy,” Harris said.
However, there was “no scheme that any government can devise”, that would be better than a deal to roll back the tariffs, he said.
The worst hit sectors in Ireland are expected to be exporters of whiskey, butter and pharmaceuticals.
Ireland’s huge flow of pharma exports to the US was not hit last week. There is a clear expectation in both Brussels and Dublin that Trump is set to announce tariffs on the pharma sector at a later date.
On Sunday, Minister for Finance Paschal Donohoe indicated that efforts to help employers to find additional markets are favoured by the Government over a wage subsidy scheme for affected businesses. He told RTÉ radio he does not believe an economywide scheme of the kind introduced during the Covid-19 pandemic would be “appropriate”.
Equities “could get a lot sicker yet” from Trump’s “medicine”, an economist has warned.
Thomas Mathews, Head of Markets for Asia Pacific at Capital Economics, writes: “The carnage in global equity markets has continued after President Trump doubled down on his tariff plans, noting that ‘sometimes you have to take a medicine to fix something’.
“We still think he will lower the dosage by paring back his tariffs. But, if he doesn’t, equities could get a lot sicker yet.”
The sharp fall in the markets add to the case for the EU to go easy in its initial reaction to Trump’s tariffs, Cliff Taylor writes.
The US president may feign indifference, but this will be a big issue on Main Street in America as well as Wall Street, as voters see the value of their pension pots fall. There is a case for the EU waiting to see how this plays out and influences decisions in Washington.
The EU will feel obliged to respond quickly to the steel and aluminium tariffs imposed earlier – Ireland will hope that indications that American bourbon will be excluded are carried through.
But it will hold off for now on reacting to last week’s so-called reciprocal tariffs, though it will be interesting to see what indications emerge here too from today’s trade ministers meeting.
For now, everyone awaits the opening of the US markets.
Germany’s incoming chancellor, Friedrich Merz, has warned that the stock market slump could get worse.
Merz, leader of the Christian Democratic Union, on Monday called for swift action to secure Germany’s competitiveness in response to sliding stock and bond markets.
“The situation on the international equity and bond markets is dramatic and threatens to deteriorate further. It is therefore more urgent than ever for Germany to restore its international competitiveness as quickly as possible,” Merz said in an emailed statement to Reuters.
“This issue must now be at the centre of the coalition negotiations,” he added of his conservative bloc’s talks to form a government with the Social Democrats, repeating his party’s calls for tax cuts, a reduction in red tape and lower energy prices.
Together with other European Union countries, Germany faces 25 per cent import tariffs on steel and aluminium and cars, and “reciprocal” tariffs of 20 per cent from Wednesday for almost all other goods.
The tariffs only add to trade-sensitive Germany’s economic headache, muddying attempts by the prospective coalition government to haul Europe’s largest economy out of a two-year-long recession.
Speaking on Monday, Tánaiste and Minister for Foreign Affairs Simon Harris said he expected the final list of products that would be hit by EU tariffs would be published later this evening.
“We’ve yet to see the final list, I did write to the commission outlining Ireland’s concerns and views as part of the consultation. I would have highlighted the issue of bourbon and questioned, I suppose, the strategic relevance of it now,” he said. “I hope that’s reflected in the finalised list this evening,” he said.
Dublin and other EU capitals were concerned by threats from Trump, that if the EU put import taxes on US bourbon, he would respond with tariffs of 200 per cent on Irish whiskey, French champagne, Italian wine and other spirits sold from Europe to the US.
The first package of EU tariffs will hike import duties on about €26 billion worth of US trade. This is part of an initial response to tariffs Trump announced on all imports of steel and aluminium last month. EU states will likely vote to approve the commission’s tariff package on Wednesday this week.
The commission is already working on a second, much larger package of trade levies, to hit back against Trump’s “Liberation Day” tariffs on nearly all imports announced last week.
The European Commission, the EU executive arm responsible for the bloc’s trade policy, is finalising a list of US products it plans to hit with its own trade tariffs, writes Europe Correspondent Jack Power.
That list of products has been the subject of a lot of behind-the-scenes lobbying from national capitals over the last few weeks. It is expected to include tariffs on imports of Harley Davidson motorbikes, soybeans, cosmetics and denim jeans.
Ireland and others, such as France and Italy, have been pushing for the EU to rethink putting tariffs on US bourbon.
The Irish Times reported late last week that it looked like that lobbying effort has been successful, and bourbon was no longer expected to be included in the list of US products hit with counter-tariffs.
The suggestion US tech multinationals would be targeted in the EU’s retaliation, through the use of the bloc’s powerful anti-coercion instrument (ACI), would be an “extraordinary escalation”, Simon Harris said in Luxembourg.
The instrument, which has never been used, would allow the EU to seriously curtail the economic activity of social media giants and other US companies. It is known colloquially as the “big bazooka” of the EU’s trade arsenal.
The Fine Gael leader said turning to those emergency trade powers would be the “nuclear option,” when the focus should be on opening negotiations with the White House, Jack Power reports.
“I’m very clear from my engagement with multiple European counterparts, and our ongoing engagement with the [European] commission, that the majority view is certainly not in that space of going near the ACI at this moment in time,” he said.
Dario Perkins, an economist at TS Lombard in London, said tariffs are “highly regressive” and will hit people on low incomes the hardest.
He’s predicting that US companies will start to lay off workers, prompting fears of a recession.
Tánaiste and Minister for Foreign Affairs Simon Harris said it was crucial the EU reacted in a “calm and measured way” to Trump’s sweeping tariffs, our Europe Correspondent Jack Power reports.
Speaking on his way into a meeting of EU trade ministers in Luxembourg, Harris said Europe was “up for a deal” with the US. The prospect of negotiations had also been mentioned by the US side in recent days, the Fine Gael leader said.
The reaction of the global markets to Trump’s tariff plan would make the likelihood of the US sitting down at the negotiating table an “inevitability”, he said. “I really think economics is on our side here,” he said.
It was crucial that the EU stuck together in the coming days and weeks, he said.
“People thought European unity wouldn’t hold up in relation to Ukraine, it largely did. They thought it wouldn’t hold up in relation to Brexit, it did. They thought it wouldn’t hold up in relation to Covid, it did. I’ve no doubt that European unity is our strength here,” he said.
Taiwan’s stock index, TAIEX, has closed with its biggest drop on record.
The benchmark Taiex fell 9.7 per cent on Monday, taking its decline from a July peak to more than 20 per cent.
Taiwan Semiconductor Manufacturing Co, which has the top weighting in the index at more than one-third, slid by the exchange’s daily limit of 10 per cent.
While levies targeted at semiconductor exports are excluded so far, the 32 per cent tariff on Taiwan is among the highest in Asia and caught investors off guard.
“The Taiwan index is tech-dominant, and their tech companies are closely tied to US clients, thus suffering from dual concerns related to US over AI investments and both first and second order impact of tariffs,” Xin-Yao Ng, a fund manager at Aberdeen Investments said.
– Bloomberg
As we reported earlier, Tánaiste Simon Harris is in Luxembourg to discuss the tariffs with fellow EU trade ministers.
“A trade war is in no one’s interest,” Harris said in a statement.
“While we are disappointed that we have reached this point, we must continue dialogue and negotiation. There is always time to strike a deal.”
One of Australia’s largest pension funds, UniSuper, has upgraded its probability of a US recession and plans to cut its exposure to the country in the wake of Trump’s tariffs and the resulting market chaos.
“Medium-term, I think there are big asset allocation decisions to be made,” UniSuper chief investment officer John Pearce said on podcast produced by the fund.
“Like every other fund in Australia, we have quite a large exposure to US assets, and that’s been a very good place to be investing over the last couple of years, particularly given the US tech story,” he said.
“We’ll be questioning that commitment. Frankly, I think we’ve seen peak investment in US assets. Donald Trump is turning out to be horrible for business.”
Australia’s A$4.2 trillion pension industry typically has around a third of its portfolio in global equities, with a sizeable chunk of that invested in the US market. Top funds including UniSuper were in the US in February, looking to push deeper into the market as an investment destination, particularly in private assets.
Mr Pearce said a recession was now more likely, without mentioning a specific likelihood, saying tariffs are bad for global trade and US consumers. “This is going to effectively be a tax – a consumption tax – on the US consumer.”
– Bloomberg
A top Chinese official has hit out at Trump’s tariffs, saying they amount to “economic bullying”.
Chinese foreign ministry spokesperson Lin Jian on Monday said that threats and pressure are not the right way to deal with China.
The tariffs are “typical unilateralism and protectionism, and economic bullying”, Lin told a press conference, adding that US tariffs in the name of reciprocity only serve its own interest at the expense of other countries.
Last week, Trump introduced an additional 34 per cent tariff on Chinese goods as part of steep levies imposed on most US trade partners, bringing the total duties on China this year to 54 per cent. China retaliated with a series of countermeasures.
Lin deferred to other bodies the question of whether China would engage in negotiations with the United States.
– Reuters
Perhaps unsurprisingly, investor morale in the euro zone tumbled in April to its lowest point in more than a year, according to a survey published on Monday.
The Sentix index for the euro zone fell to -19.5 in April from -2.9 in March, its lowest level since October 2023 and below the -10.0 forecast by analysts polled by Reuters.
The 27-nation bloc faces 25 per cent import tariffs on steel and aluminium and cars and “reciprocal” tariffs of 20 per cent from Wednesday for almost all other goods under Trump’s measures.
The survey of 1,127 investors from April 3rd to 5th showed that economic expectations for the next six months were hit particularly hard by the tariff announcement, falling by 33.8 points to -15.8 in April.
That is the second sharpest fall in the history of Sentix data since 2002, topped only by Russia’s invasion of Ukraine.
The current situation index recorded only a slight fall, to -23.3 in April from -21.8.
Expectations for Germany, Europe’s largest economy, recorded an even stronger fall, dipping by 36.3 points to -15.8 in April.
“Hopes following the planned debt orgy have been buried,” said Sentix in a statement, referring to debt-financed investments planned by the newly forming German government aimed at bumping up defence and infrastructure.
More news from Asia: The Hang Seng index in Hong Kong has closed 13.2 per cent down – its biggest drop in a single day since 1997, Reuters reports.
Wall Street’s ‘fear index’ has surged to its highest level since the early days of the Covid-19 pandemic.
The VIX index, which measures market volatility, has almost doubled today to almost 60 points.
It’s bad news too for crypto.
Cryptocurrencies have wiped out almost all their gains since Trump’s election win in early November.
Bitcoin tumbled below $75,000 on Monday for the first time since November 7th, dropping as much as 5.3 per cent. The total market capitalisation of all cryptocurrencies fell about 12 per cent to $2.47 trillion, roughly where it stood when Trump sealed his victory, according to CoinGecko data. Ether dropped to the lowest since March 2023.
The slide comes as Trump digs in on sweeping tariffs that have already wiped trillions in value from global equities, and dashed hopes that crypto would withstand the pressure better than other assets.
Coinglass data show about $868 million worth of bullish crypto wagers were liquidated in the past 24 hours, the most in nearly six weeks.
– Bloomberg
Some analysis from Cliff Taylor: The falls in markets overnight and early in European trading are significant and show deepening concerns over Donald Trump’s tariff policies.
The Chinese reaction to Trump’s move and signs that the US president is digging in have really shaken nerves.
The Stoxx Europe 600 index – a measure of the biggest European stocks was down 6 or 7 per cent in early trading, while Germany’s Dax plunged 10 per cent initially and subsequently came back to around 7 per cent down. The FTSE 100 in London was down almost 5 per cent.
Added to the falls last week, this is leading to significant pain for investors and all the signs are that Wall Street will open nervously today, unless there is some positive signal from the White House.
European markets may settle a bit after the initial fall – but we are into a volatile situation and experts say that if longer-term investors just shorter-term speculative money in selling, stocks could head lower again. It remains to be seen what impact this will have on the US president.
European markets have also taken a hit this morning.
The German DAX opened down 10 per cent before recovering somewhat; it’s now down 7 per cent.
The French CAC is down 6 per cent and the FTSE is currently 5.2 per cent lower.
European shares plunged to a 16-month low on Monday as investors grappled with the possibility of a recession, Reuters reports.
The pan-European STOXX 600 slumped 5.8 per cent this morning, after registering its steepest one-day percentage decline since the Covid-19 pandemic on Friday.
Trade-sensitive Germany’s benchmark index dove 6.6 per cent, among the worst hit, with Commerzbank and Deutsche Bank shedding 10.7 per cent and 10 per cent, respectively.
Arms makers, which had surged earlier this year on prospect of higher defence spending, were also knocked down on Monday. Tankmaker Rheinmetall dropped 23.7 per cent, the most on STOXX 600, while Hensoldt, Rheinmetall and Renk fell between 17 per cent and 21 per cent.
Big stock indexes plunged in Asia on Monday as US president Donald Trump showed no sign of backing away from his sweeping tariff plans, and investors bet the mounting risk of recession could see the Federal Reserve cutting rates as early as May.
Futures markets moved swiftly to price in almost five quarter-point cuts in US rates this year, pulling Treasury yields down sharply and hampering the dollar on safe havens.
The carnage came as Trump told reporters that investors would have to take their medicine and he would not do a deal with China until the US trade deficit was sorted out. Beijing declared the markets had spoken on their retaliation plans.
Read our story here.
Trump tariffs: Ireland seeks ‘firm’ EU response and explores new export markets: Our lead story this morning discuss what the EU response may be:
The State will advocate for a “firm but proportionate” European response to US president Donald Trump’s tariffs when European Union trade ministers meet on Monday.
The Government is exploring ways to ramp up assistance to businesses seeking to diversify their export markets. This comes amid concern over the impact of the tariffs on those selling goods to the United States.
Minister for Trade Simon Harris will attend a summit of EU trade ministers in Luxembourg today.
Donald Trump, speaking to reporters aboard Air Force One on Sunday after a weekend of golf, indicated he was not concerned about losses that have already wiped out trillions of dollars in value from equity markets around the world.
“I don’t want anything to go down. But sometimes you have to take medicine to fix something,” he said as he returned from golfing in Florida.
Trump said he had spoken to leaders from Europe and Asia over the weekend, who hope to convince him to lower tariffs as high as 50 per cent due to take effect this week.
“They are coming to the table. They want to talk but there’s no talk unless they pay us a lot of money on a yearly basis,” Trump said.
Japan’s Nikkei sank 6.6 per cent to hit lows last seen in late 2023, while South Korea dropped 5 per cent. MSCI’s gauge of Asia-Pacific shares fell 7.8 per cent to head for its largest single-day drop since 2008.
Chinese blue chips lost 6.3 per cent, as markets waited to see if Beijing would respond with more stimulus. Taiwan’s main index, which had been shut on Thursday and Friday, tumbled nearly 10 per cent, leading policymakers to curb short selling.
All of emerging Asia was also under water, with India’s Nifty 50 sinking 4 per cent.
