Closing post
Time to wrap up….
Stocks are falling on Wall Street as last Friday’s rejection of Donald Trump’s sweeping global tariffs by the supreme court reverberates around global markets.
The main US share indices are solidly in the red, with the Dow Jones industrial average now down almost 850 points or 1.8% so far today.
Investors said Friday’s ruling that tariffs imposed under the International Emergency Economic Powers Act (IEEPA) were unlawful had created fresh uncertainty, with Trump retaliating with a new 15% global tariff.
The US president has declared that he can use tariffs in a “much more powerful and obnoxious way”, as the UK and the EU sought urgent clarity on the US trade deals they struck last summer.
Trump threatened to ramp up his global tariff war on Monday, after a supreme court ruling last week that he had overstepped his legal authority to impose his “liberation day” measures last year.
Keir Starmer’s spokesperson said he did not expect Trump’s new 15% global tariff – announced on Saturday – to affect the “majority” of a UK-US economic deal that was agreed last year.
However, it is still not clear if the new tariffs, collected from Tuesday, will be at the 10% rate on most goods agreed last May, the 15% rate, or customs default to pre-reciprocal day tariffs.
Faced with this uncertainty, the European Parliament decided today to pause the ratification process relating to the US trade deal, helping to push markets lower.
Following that move, Trump warned that:
Any Country that wants to “play games” with the ridiculous supreme court decision, especially those that have “Ripped Off” the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to.
Economists said that countries such as China, India and Brazil would benefit from the new 15% global tariff, as it was lower than their previous levies under IEEPA,
The US Customs and Border Protection (CBP) agency said it would deactivate all tariff codes associated with International Emergency Economic Powers Act-related orders as of Tuesday at midnight (5am UK time).
A Bank of England policymaker warned that US tariffs are “here to stay” and could lead to shockwaves across the economy for “many years”,
Here’s the latest:
Full story: Stock markets stumble as global trade faces more Trump tariff uncertainty
Stock markets stumbled on Monday as Donald Trump pushed ahead with fresh tariffs on the US’s trading partners despite a supreme court strike-down and growing opposition from domestic voters.
Uncertainty over the status of global trade deals spooked investors, trigging a drop in US shares prices including on the Dow Jones industrial average, which tumbled 1.4% in morning trading. The S&P 500 and Nasdaq 100 also fell 0.9% and 1.1%, following losses for UK and European stock markets.
Shareholders were struggling to discern the next steps in Trump’s global trade war, after the US supreme court ruled on Friday that the president overstepped his legal authority by using emergency measures to impose tariffs on countries across the world last year.
But Trump went on to announce over the weekend that he would push ahead and impose temporary tariffs on US imports from all countries: first declaring a 10% rate, before hiking that figure to 15%, under a never-before-used section of the Trade Act of 1974.
What could Donald Trump’s have in mind when he threatens new “obnoxious” tariffs?
Grave Zwemmer, US economist with Oxford Economics, said Trump could impose limitless”punitive” tariffs on any country under section 301 of the Trade Act which could last four years.
But if he chose this route to maintain tariffs it would not happen overnight and his existing threat of using section 122 would only be a temporary measure.
She says:
“While there are no limits on how high the tariff rates can be, implementation requires an investigation by the US Trade Representative, which must find evidence of discriminatory or illegal trade practices by the country in question.
There’s no break in the selling on Wall Street.
The Dow Jones Industrial Average is now down 771 points, or 1.55%, today at 48,854 points.
Investors are continuing to react badly to the trade war uncertainty, and president Trump’s threat of new ‘more powerful and obnoxious’ tariffs…..
European market close
European stock markets have closed, with losses in Frankfurt and Paris.
Fears that Europe’s trade deal with the US is threatened by Donald Trump’s new 15% tariff wiped over 1% off Germany’s DAX index today.
France’s CAC lost 0.22%.
In London, though, the FTSE 100 has closed almost flat, supported by gains among precious metals producers and defensive stocks such as tobacco firms and utilities.
Danni Hewson, AJ Bell head of financial analysis, sums up the day:
“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.
“How will current trade deals fit into the new framework? Will ‘Plan B’ require sign off from Congress or will Donald Trump’s administration be able to keep reapplying the new tariffs every 150 days? What about the billions that have flowed into US coffers over the past months. Will that have to be paid back?
“Whilst bigger businesses have the capacity and cash flow to weather this fresh storm front, smaller companies will be feeling rather weary and some will struggle to come up with their own Plan B.
Gold is continuing to rally, amid the scramble for safe assets.
Bullion is now up 2% today at $5,209 an ounce.
Here’s Joe Mazzola, head trading & derivatives strategist at Charles Schwab, on today’s Wall Street losses:
“Tariff uncertainty reigned this morning, pushing stocks to early losses and raising volatility on Wall Street.
Investors kept buzzing over the Supreme Court’s 6-3 decision Friday to overturn President Trump’s trade barriers, which threw world trade into confusion and raised questions about the durability of trade deals struck under auspices of the tariff regime.”
US told in G7 trade meeting to treat Europe fairly, France says
G7 countries have urged the US to ensure they give European countries fair treatment, following the supreme court ruling on tariffs on Friday, France’s trade ministry has revealed.
Afterr hosting an online meeting of G7 trade representatives today, an official from France’s trade minister’s office says:
“The Europeans must be treated fairly as partners and companies need visibility.”
The Russell 2000 index, which tracks two thousand small US company stocks, has dropped by 1.8%.
BritishAmerican Business (BAB), the transatlantic trade organization, is concerned that UK businesses will be hit by higher tariffs once Trump’s new global tariff of 15% kicks in tomorrow.
BritishAmerican Business CEO Duncan Edwards says:
“The new 15 per cent tariff on imports into the US, imposed under section 122 of the 1974 Trade Act means an effective 50 per cent increase in the tariff rate for most UK exporters to the USA which will come into effect tomorrow.
“This is clearly disappointing news and begs important questions which the UK team will need to raise with their opposite numbers and for which businesses will be hoping for answers.
“First, will the UK be granted a ‘discounted’ 10 per cent tariff under this new Executive Order in line with the Economic Prosperity Deal? Second, will UK exporters be able to claim back tariffs that have been previously paid and how will that process work?
And third, what will happen when the 150 day period allowed by the Act expires?
“It seems to us that the answer to the third point now lies with Congress which will have to decide whether the trade policies promised by this administration during the election become enshrined in law. Given the narrow margins in both houses of Congress a definitive answer looks unlikely, so business would be wise to expect continued uncertainty.”
Avatrade: Tariff changes have made markets wobbly
Kate Leaman, chief market analyst at AvaTrade, says:
“The Supreme Court’s decision last week to block President Trump’s big emergency tariffs gave markets a quick lift, but his fast follow-up, has markets wobbly again today.
“Trump bumped this from a 10% blanket tariff, skipping some energy and minerals but nailing most imports. It’s spooked the EU into pausing deals and India into delays. US companies buying abroad, in tech, factories and gadgets, face fresh cost squeezes – though milder than before.
“This isn’t a permanent end to trade disputes. The workaround lasts a maximum of 150 days, after which Congress will weigh in. Investors should expect further ups and downs ahead.”
UK and US government bond prices are rising, as investors shun shares in favour of safer assets.
This has pushed down the interest rate, or yield, on UK 10-year bonds to their lowest level since December 2024.
It’s a small move – 10-year bond yields are down less three basis points (0.03 percentage points) to 4.327%, but the US government will certainly welcome this, as it shows the cost of issuing bonds and servicing the national debt has fallen.
Updated
DJIA down almost 700 points
The US stock market is sliding nearly as fast as a British Winter Olympic skeleton racer.
The Dow Jones industrial average is now down 681 points, or -1.37%, at 48,944 points, after an hour of trading, as traders react to the uncertainty over US tariffs and the threats emerging on Donald Trump’s Truth Social account.
Twenty one of the thirty stocks on the index are down, led by American Express (-6.2%), Salesforce (-5.3%) and Nike (4.9%).
Updated
Trump threatens higher tariffs on countries who 'play games' on deals
A clearly fuming Donald Trump has also posted that any country who chooses to ‘play games’ with the US will face even higher tariffs.
In another post on Truth Social, the president says:
Any Country that wants to “play games” with the ridiculous supreme court decision, especially those that have “Ripped Off” the U.S.A. for years, and even decades, will be met with a much higher Tariff, and worse, than that which they just recently agreed to. BUYER BEWARE!!!
Thank you for your attention to this matter. President DONALD J. TRUMP.
It’s not clear which countries he has in mind, but earlier today the EU did postpone the ratification of its trade deal with the US, due the tariff uncertainty.
America’s factories ended 2025 on a weak note, despite Donald Trump’s efforts to revive the sector.
New orders for manufactured goods fell by 0.7% in December, the US Census Bureau has reported, following a 2.7% jump in November.
The December decrease was driven by weaker demand for transportation equipment; orders fell by 5.4% on the month.
The Dow Jones industrial average is continuing to drop.
After almost half an hour’s trading it has lost 321 points, or 0.65%, to 49,304 points.
Nike are among the top fallers, now down 3.8%, while business software group Salesforce has lost 4.5% and American Express is down 4.2%.
The S&P 500’s now down 0.4%.
Updated
The apparent winners from Donald Trump’s 15% tariff may not be celebrating for long.
Stephen Brown, deputy chief North America economist at Capital Economics explains:
While the imposition of a new temporary baseline 15% tariff means the average US tariff rate has not fallen much, several economies – including Brazil, China and others in Asia – find themselves in much better positions.
This may not last, however, as the administration intends to start Section 301 investigations into potential unfair trade practices, which would enable Trump to hike tariffs again.
EU postpones ratification on US trade deal
The European Parliament has just decided to pause the ratification process relating to the US trade deal struck with Donald Trump last July in Scotland.
A vote tomorrow morning in the Trade Committee has been postponed.
Anna Cavazzini, trade policy spokesperson for the Greens/EFA group, comments on this decision:
“Given the current enormous uncertainty, a vote would be unjustifiable. The new tariffs on EU exports are over 15 percent, thus violating the deal. At the same time, Trump continues to blithely announce arbitrary tariffs. This lack of trust prevents simply rubber-stamping the implementation of the US deal now.”
“The top priority must be finding a solution for the remaining 50% tariffs on steel, aluminum, and related products. The ball is now in the US’s court. Tariffs are extremely unpopular and have not led to the industrial jobs promised by Trump.”
Nike and Gap shares hit by tariffs
Shares in US importers are falling in early trading, as investors digest the impact of the new 15% global tariff annouced by Donald Trump on Saturday.
Sportswear firm Nike are among the top fallers, down 1.8%, while clothing and accessories retailer Gap are down 3%.
Wall Street has opened lower, as investors respond to Donald Trump’s new 15% tariff, and his threat of new ‘powerful and obnoxious’ ones too!
The Dow Jones industrial average, which tracks 30 large US companies, fell by 144 points or 0.3% at the start of trading, to 49,481 points.
The broader S&P 500, and the tech-focused Nasdaq, both dipped by a mere 0.07%.
Manufacturers seek urgent clarity over tariff situation
The confusion over whether the UK will face Trump’s new 15% tariff is particularly worrying for British manufacturers who have already sent goods to America.
Richard Rumbelow, director of international business at Make UK, says these firms ‘urgenty’ need clarity:
“Many UK exporters will be concerned at the further prospect of trade disruption to goods entering the US market. Stability, certainty and clarity are key cornerstones for global trade policy and for UK businesses who plan, invest and conduct trade with partners across the global economy, and particularly with customers in the United States. It’s now important UK exporters work with their US importers to maintain their trading relationships by working through customs guidance as it emerges
“Given many companies will have goods at sea clarity is now urgently required on how UK exports will be treated on arrival into the United States, with the imperative being to protect the benefits of the bi-lateral trade framework that was concluded with the United States last year. It is vital Government continues to seek gradual reductions in tariffs and other opportunities and seeks a strengthening of trade relations from the current position.”
Artificial intelligence is unlikely to affect UK unemployment rates in the long run, a policymaker at the Bank of England has suggested.
Alan Taylor, a member of the Monetary Policy Committee (MPC), which sets interest rates in the UK, said he can’t see AI creating mass unemployment for now.
At an event at Deutsche Bank in London, Taylor said:
“History is full of people saying ‘This new technology is going to lead to unemployment.’ And yet, over the course of history, unemployment has always returned to its normal level.”
“There are changes in the composition of the labour force but we haven’t yet seen that kind of structural shift, which is not to say it can’t happen, but we haven’t seen it yet.”
Taylor, who was one of four out of nine members of the MPC to vote for cutting interest rates this month, said the increase in youth unemployment, which rose to an 11-year high in January excluding Covid, was cyclical and unlikely to last long-term.
He said:
“It always goes up in cyclical ways. When the economy weakens and when unemployment is rising, usually youth unemployment rises faster. That’s true across the world. So for me, it’s mostly cyclical. I believe that as the economy normalises, that will start to normalise again.”.
Taylor reiterated his previous public comments that inflation is returning to the Bank’s 2% target faster than previously forecast, with wage growth also now slowing. “Things are normalising at a pretty healthy clip,” he said, suggesting he will vote to cut rates again at the MPC’s next meeting in March.
He said the MPC could make two to three more interest rate cuts to get the economy back to a normal level. But he expressed concern that services inflation had not declined as quickly as expected in recent months. Services inflation slowed to 4.4% in January from 4.5% previously, according to the latest data, well below the Bank’s forecast of 4.1%.
“I’m looking for services price inflation to continue to normalise along with wages as the year unfolds,” Taylor said.
Back in Europe, Germany’s stock market is still being weighed down by trade war uncertainty.
The DAX is down 0.4% so far today. Other markets are looking cheerier, though – Italy’s FTSE MIB has gained 1%.
Yen's purchasing power hits 53-year low
We discuss the fate of the dollar all the time, but what about the trajectory of Japan’s yen, asks senior economics writer Phillip Inman?
Japanese newspapers have spotted that figures from the Geneva-based Bank of International Settlements - the information and advice centre for the world’s central bankers - has published figures showing the the yen’s purchasing power has sunk to a 53-year low against a basket of major currencies. That’s the lowest level since 1973 and the era of fixed currencies.
You might say it is how the world’s third largest economy has maintained its prowess as a major manufacturing exporter in the face of stiff competition from China, Vietnam and Taiwan. And that is not by being more productive, but by consistently devaluing the currency to make exports cheaper.
The figures, which were published by the BIS on Friday, document a fall in real effective exchange rate, which peaked in April 1995 at 193.95.
Nikkei Asia reports that the current real effective exchange rate has since fallen to roughly a third of that level. It shows that the yen has weakened against a wide range of currencies, including the U.S. dollar and euro, as well as the Chinese yuan and Thai baht.
One major factor is the prolonged slump in the Japanese economy, known as the “lost decades,” following the collapse of the bubble economy.
By keeping interest rates at ultra low levels relative to other major economies, Japan’s central bank has encouraged global investors to hold assets in any other currency than the yen.
It causes huge issues inside Japan because imports are more expensive and because travelling to foreign countries is more expensive when the yen’s value is low.
But the low yen has allowed businesses to maintain their status as exporting powerhouses, giving them the profits they need to pay staff well and reward shareholders.
During her short tenure as prime minister, Sanae Takaichi, whose party won a historic landslide in a lower house election this month, has seen the yen slip further, most likely in response to her plans for a spending blitz, mostly with borrowed money.
She could be blamed by the public for higher domestic prices before she has even begun to tackle issues like low foreign investment, which would usually capitalise on a rock-bottom currency value.
Donald Trump wants the yen to rise in value, making the dollar cheaper, and aiding US exports. The Bank of Japan has said it will raise interest rates to make the yen more attractive to investors and push up its value. However, many economists in Japan are nervous about the effect on small and medium-sized businesses, which has become dependent on cheap debt after 40 years of ultra low borrowing costs.
Updated
Trump threatens 'more powerful and obnoxious' tariffs
Donald Trump has declared that he can use tariffs in a ‘much more powerful and obnoxious way’ than he has thus far.
Posting on his Truth Social network, the US president again attacked the supreme court for ruling against his sweeping global tariffs last Friday – calling them ‘incompetent’.
He also claims the justices have ‘‘accidentally and unwittingly’ expanded his presidential powers on tariffs.
Trump writes:
The supreme court (will be using lower case letters for a while based on a complete lack of respect!*) of the United States accidentally and unwittingly gave me, as President of the United States, far more powers and strength than I had prior to their ridiculous, dumb, and very internationally divisive ruling.
For one thing, I can use Licenses to do absolutely “terrible” things to foreign countries, especially those countries that have been RIPPING US OFF for many decades, but incomprehensibly, according to the ruling, can’t charge them a License fee - BUT ALL LICENSES CHARGE FEES, why can’t the United States do so? You do a license to get a fee! The opinion doesn’t explain that, but I know the answer! The court has also approved all other Tariffs, of which there are many, and they can all be used in a much more powerful and obnoxious way, with legal certainty, than the Tariffs as initially used.
Our incompetent supreme court did a great job for the wrong people, and for that they should be ashamed of themselves (but not the Great Three!).
[That’s a reference to the minority of three justices who backed Trump in last week’s ruling].
* – or perhaps he’s now following the Guardian style guide
Updated
UK does not expect new Trump tariff to impact its US deal, PM spokesman says
Over in Westminster, prime minister Keir Starmer’s spokesman has said Britain does not expect US President Donald Trump’s new global tariff of 15% to impact the “majority” of the UK-US economic deal.
The spokesman said Britain’s trade minister, Peter Kyle, had spoken with Jamieson Greer, the U.S trade representative, and the government expects discussions between British and U.S. officials to continue this week, Reuters reports.
Bank of England's Taylor: high US tariffs appear to be here to stay
Bank of England policymaker Alan Taylor has warned that high US import tariffs appear to be here to stay.
The full impact is likely to take “many years” to be felt, Taylor added.
Speaking at an event organised by Deutsche Bank today, Taylor said:
“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.
“So I think we should expect this shock to play out also over many years.”
Adding to the confusion, there’s also uncertainty whether the new 15% tariffs are legal.
That’s because Trump is using section 122 of the Trade Act of 1974, which gives the president the power to impose surcharges and import restrictions to tackle international payments problems.
But some experts are questioning how the US can have a balance-of-payments problems in an era of floating exchange rates.
Gita Gopinath, the former first deputy managing director of the International Monetary Fund, declared yesterday that the US does not have a fundamental international payments problem:
Wearing my (former) IMF hat I will say that the US does not have a fundamental international payments problem.
— Gita Gopinath (@GitaGopinath) February 22, 2026
A balance of payments (BoP) problem arises when a country loses market access or is close to losing market access. As long as there is plenty of demand for US debt and equities, which is the case, the US does not have a 'payments' problem. It can finance its trade deficits…
— Gita Gopinath (@GitaGopinath) February 23, 2026
Atakan Bakiskan, economist at Berenberg, has written about this issue:
Are the new tariffs even legal? The new Section 122 tariffs may also face court challenges, as the current US trade deficit may not meet the condition of “large and serious balance-of-payments” deficits that grant the president authority to impose tariffs to address “fundamental international payments problems.”
First of all, isn’t the balance of payments always equal to zero as an accounting identity under a flexible exchange rate regime? Second, what qualifies as “large and serious”? No president has ever invoked Section 122 before, so any legal challenge will likely take time to resolve.
EU seeking 'additional clarity' from US over tariffs
The EU has said “additional clarity” is required from the US as to whether the tariff agreement it struck last July in Scotland still stands, after Donald Trump announced a new global tariff of 15% on Saturday.
‘We are very clear what needs to happen here. The US needs to tell us precisely what is going on. Our intention is to continue implementing the aspects of the agreement we made with the US,” said trade spokesman Olof Gill.
Gill added:
“Additional clarity is required. And I think it’s very fair to say that full clarity on what these new developments mean for the EU US trade relationship is the absolute minimum that is required in order for us as the EU to make a clear eyed assessment and decide on next steps.”
The German chancellor Friedrich Merz has said he expects Donald Trump to respect the tariff deal struck last July at his Scottish golf course.
As confusion reigns across the globe as to whether the new 15% tariff rate, announced by the US on Saturday, would be implemented for the UK, the EU and others, Merz’s spokesperson said:
“We expect the US to follow the Supreme Court of the US decision with clear policies.”
The EU on Sunday called on the US to honour the July agreement. “A deal is a deal” it said.
The new 15% tariff rate Trump says he will impose from tomorrow flows from powers in the 1974 Trade Act, a different legal framework to the reciprocal tariffs Trump imposed unilaterally last year on dozens of countries.
They can only hold for 150 days and must then get congressional approval.
ING: Asia should benefit from tariff changes
Asia should emerge as a beneficiary of the US tariff reset, as the removal of the IEEPA tariffs by the supreme court lowers effective tariff rates for key exporters like India, China, and Vietnam, says ING analyst Deepali Bhargava.
Bhargava says China stands to gain meaningfully from the removal of IEEPA tariffs, while the supreme court ruling arguably improves India’s negotiating position as it hammers out an interim trade deal with the US.
Vietnam, meanwhile, could be the region’s biggest winner, as the move to a flat 15% tariff will make an even more favourable production base for US-bound goods.
While Japan and South Korea gain little on tariffs alone, their strategic trade and investment deals with the US should continue as planned, Bhargava adds.
Updated
The European Parliament is set to pause the process of ratification of the trade deal with Donald Trump later this afternoon, the lead negotiator of the conservative group of MEPs has said.
The parliament has already paused the deal once, over Trump’s threat to Greenland, but unpaused earlier this month with a vote of all MEPs expected in March to formally ratify the agreement.
Bernd Lange, chair of the International Trade Committee of the European Parliament, has convened an extraordinary meeting on Monday following the supreme court ruling in the US striking down the tariffs as illegal.
Zeljana Zovko, the lead trade negotiator in the European People’s Party group on the US deal told Bloomberg that “we have no other option” but to delay the approval process to seek to clarity on the situation.
Updated
How Trump's 15% tariff could disrupt UK supply chains
Potential shockwaves from Donald Trump’s global 15% U.S. tariff could disrupt UK supply chains overnight, warns Dr Jonathan Owens, senior lecturer in operations management and global supply chain expert at the University of Salford.
If implemented, a 15% tariff policy under Donald Trump could send immediate shockwaves through UK supply chains, despite the measures being imposed by the United States. The UK is tightly woven into global trade networks, and many British firms either export directly to the U.S. or supply critical components that feed into American markets. A sudden cost barrier of this scale would not be contained within U.S. borders and could ripple quickly across the Atlantic.
In the short term, higher U.S. import costs would likely suppress demand for UK goods, particularly in strategically vital sectors such as automotive manufacturing, aerospace, machinery, and pharmaceuticals. British suppliers embedded in transatlantic production lines could face abrupt order cancellations, forcing production cuts and leaving warehouses with unsold inventory. For smaller firms operating on thin margins, such disruption could quickly escalate into a cash-flow crisis.
The indirect fallout could be equally destabilising, Owens continues:
Countries hit by falling U.S. demand may flood European markets with surplus goods, intensifying price competition and squeezing UK manufacturers. At the same time, currency volatility could surge, driving up hedging costs and injecting further unpredictability into procurement and pricing strategies.
Logistics networks would not escape unscathed, as shipping routes could be rapidly reconfigured as firms scramble to avoid tariff exposure. This could lead to port congestion, delivery delays, and rising freight costs.
While the long-term consequences would depend on political negotiations, the immediate impact would be clear: heightened uncertainty, mounting cost pressures, and a period of acute supply chain turbulence as UK businesses fight to remain resilient.
However, this could ultimately prove to be little more than a burst of political theatre, generating headlines rather than lasting economic damage. If the policy were short-lived, disruption to UK supply chains might be sharp but brief.
Confusion reigns in UK and EU over 15% tariff
Confusion continues as to whether Donald Trump’s new 15% tariffs kick in tomorrow in the UK or the European Union, despite the US trade representative Jamieson Greer’s assurances that nothing changes for the 20-odd countries the US has already agreed tariff deals with.
The new president of the British Chambers of Commerce, Andy Haldane, told the BBC he believed that the 15% tariffs did apply from tomorrow unless the government hears otherwise.
Haldane told the BBC Today programme:
“We are 10% [tariff rate with the US]. If he [Trump] follows through tomorrow, that will be 15% and that will mean UK sits towards the bottom the league table in terms of who’s been made worst off by the measures of the weekend.”
And the German confederation of businesses, BDI, called on the EU to “quickly approach the US and provide clarity on tariffs and trade rules”.
With European stock markets down today, and analysts warning of an ‘unholy mess’ of tariff confusion, BDI president Peter Leibinger said:
“These decisions create significant new uncertainty for transatlantic trade. Businesses on both sides of the Atlantic urgently need planning certainty and reliable trading conditions.
The EU, with the support of the German government, should quickly approach the United States and provide clarity on tariffs and trade rules. Only through dialogue can transparency be established and trust in transatlantic economic relations be secured.”
On Sunday Greer told CBS that the US will not back out of tariff deals it has already sealed with countries around the world, including the UK, the EU, Japan, Switzerland and others.
“We want them to understand these deals are going to be good deals,” Greer said. “We’re going to stand by them. We expect our partners to stand by them.”
In a strongly worded statement, the EU called on the US not to walk back the July deal.
“A deal is a deal,” it said, adding:
“As the United States’ largest trading partner, the EU expects the US to honour its commitments.”
Updated
Shares in Danish pharmaceutical firm Novo Nordisk are sliding, after it announced disappointing results from a key weight loss trial.
An 84-week trial of its CagriSema weight loss product found that it caused a smaller weight loss than a rival product, Eli Lilly’s tirzepatide (injectable Mounjaro).
People treated with CagriSema achieved a weight loss of 23.0% after 84 weeks compared to 25.5% with tirzepatide, Novo reported. As such, the trial did not achieve its primary endpoint of demonstrating non-inferiority on weight loss for CagriSema compared to tirzepatide.
CagriSema appeared to have a safe and well-tolerated profile; the most common adverse events were gastrointestinal, the company reports.
Novo’s shares are down 8.5%, as investors digest this setback.
But Martin Holst Lange, executive vice president, R&D and chief scientific officer at Novo Nordisk, has a positive take, saying:
“We are pleased with the weight loss of 23% for CagriSema in this open-label trial. CagriSema has the potential to be the first GLP-1/amylin-combination product to reach the market for people living with obesity, documenting that cagrilintide adds to the existing benefits of semaglutide and offers clinically meaningful additive weight loss effects superior to what has been observed with GLP-1 biology alone.
Based on the learnings from completed studies we look forward to the REDEFINE 11 readout, and the initiation of the higher-dose CagriSema trial, which are both designed to assess the full weight-loss potential of CagriSema.
Why rising trade uncertainty is bad news
Donald Trump has managed another blow to world trade, Professor Costas Milas of the University of Liverpool’s management school.
A flat tariff rate of 15% seems, at face value, less confusing than multiple tariff rates. Nevertheless, this will apply for up to five months, after which, no exporter (or even importer) will know what to expect next. The main issue is that in anticipation of the mid-term elections towards the end of the year, and with US inflation (the Fed’s preferred measure) already at 2.9%, Trump might (or might not) be willing to lower tariffs from 15%.
The problem for the UK economy remains a significant one, not least because my recent paper shows that trade uncertainty, again on the rise, is a major driver of future GDP and CPI inflation developments…
The supreme court ruling against Donald Trump’s IEEPA tariffs is creating new cracks in the president’s “electoral-fiscal-trade” trilemma, says Grace Fan of City consultancy TS Lombard.
Fan writes:
Still, Trump’s trilemma (electoral-fiscal-trade) – in a midterm election year in which Trump’s approval rating is tanking – means the great tariff reshuffle has just begun.
With the administration’s top priorities shaping up to be voters and jittery bond markets, look for the White House to dial down tariffs further on targeted consumer items this year to address the affordability crisis, while ratcheting up Sec. 232 (national security) and 301 (“unfair” trade) tariffs to plug the IEEPA tariff revenue hole with Sec. 122 set to expire in August.
Likely losers are select industrial sectors, with the burden falling on both US importers and across core trading partners (USMCA, Asia, EU).
Doug Gurr selected as preferred candidate to chair CMA
Former Amazon boss Doug Gurr has been named as the preferred candidate to chair Britain’s competition watchdog, despite criticism of his appointment as interim chair a year ago.
Business secretary Peter Kyle has announced that Gurr is his choice of candidate to continue as chair of the Competition and Markets Authority (CMA), “following an open competition for the role”.
Kyle said the CMA has been playing a key role delivering the government’s pro-growth agenda under Gurr’s leadership since last January. He was appointed interim chair in early 2025, after the government grew frustrated that the CMA was not doing enough to support growth, and forced out its chair, Marcus Bokkerink.
Gurr’s appointment as interim chair was controversial, though; it was called a “slap in the face to workers” by trade unions and Trumpian by consumer activists. It prompted fears that the CMA would wave through business deals without the necessary scrutiny, if bosses could claim they’d be good for growth.
Financial markets are being being “rattled by fresh trade uncertainty”, reports Susannah Streeter, chief investment strategist at Wealth Club:
“The rip-roaring performance of the Footsie has been interrupted as fresh trade chaos mars the party. The exuberance that flashed over global markets after the US Supreme Court rejected Trump’s tariffs as unconstitutional is evaporating.
The President is using a backdoor via the Trade Act to reimpose temporary blanket tariffs of 10% and has threatened to increase the rate to 15%. Bilateral deals reached through tortuous negotiations have been thrown up in the air again, creating a cloud of uncertainty. Countries are already preparing to retaliate, with the European Union looking set to halt the ratification of a deal with the US and India also postponing its negotiations to finalise an agreement.
Instead of taking a big step forward, global trade has taken two steps back. Companies are having to plan multiple scenarios, and future revenue streams are harder to map when the ground keeps shifting.
Unicredit: Tariff uncertainty is back
Despite the heightened uncertainty, the supreme court ruling gives Trump “an off ramp from his tariff intensive strategy ahead of the midterm elections”, argues analysts at Unicredit.
Unicredit told clients this morning:
Last Friday, the US Supreme Court ruled, in a 6-3 decision, that the tariffs US President Donald Trump enacted under the International Emergency Economic Powers Act (IEEPA) are illegal.
This covers around 70% of all additional tariffs Trump has imposed during his second term, including the so-called “reciprocal” tariffs on almost all countries that were announced on “Liberation Day” and additional tariffs on Mexico, Canada and China related to illegal fentanyl.
The Trump administration responded over the weekend – invoking Section 122 of the Trade Act of 1974 by declaring a balance of payments crisis to impose a 15% tariff on almost all countries that will last 150 days, unless Congress decides to extend it, which seems unlikely.
The new tariffs exclude certain critical minerals, pharmaceuticals, USMCA-compliant goods from Canada and Mexico (which are covered by a free trade agreement), and those sectors subject to tariffs under Section 232 of the Trade Expansion Act of 1962 (e.g. cars, steel and aluminium).
Manufacturers are among the fallers on Germany’s DAX stock index this morning.
Carmaker BMW’s shares are down 1.4%, Daimler Truck has dropped by 1.1% and Airbus has lost 1%.
The Dutch market is also lower, pulling Amsterdam’s AEX index down by 0.4%.
German and French stock markets fall amid 'unholy mess' of tariffs
France and Germany’s stock markets have been hit by US trade uncertainty too.
In Frankfurt, the DAX index has dropped by 0.6%, as traders fret that Europe’s trade deal with the US may unravel.
France’s CAC 40 index is starting the new week in the red too, dipping by 0.35%.
Richard Hunter, head of markets at interactive investor, says:
Tariff developments have turned the situation into an unholy mess, prompting far more questions than answers. After the Supreme Court ruled against the President’s tariffs, the implications are far from clear. No reference was apparently made in the ruling as to whether the monies raised from tariffs so far would need to be repaid and, even if this is the case, whether the refunds would go to companies or the ultimate customer who will have suffered higher prices.
To further compound the confusion, the President immediately invoked a different Act and announced that he would impose a blanket 10% global tariff, which he raised to 15% the following day. This brings another level of uncertainty given the trade deals which are already in place, although spokespeople from the White House implied that these would remain in place, which seems to contradict the Supreme Court ruling.
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FTSE 100 opens lower
The London stock market has dipped slightly in early trading.
The FTSE 100 index is down 19 points, or 0.18%, at 10,668 points.
That’s despite a rally in precious metal producers (following the jump in gold and silver this morning) and miners (as the weaker dollar lifts commodity prices).
Gold hits three-week high
Gold has jumped to a three-week high, as the uncertainty over US trade policy drives investors into safe-haven assets.
Gold is up by 0.6% to $5,135 an ounce, its highest level since the end of January.
Silver is up 1.2% to its highest level in over two weeks.
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Australia's stock market drops but Hong Kong rallies
Asia-Pacific stock markets have already reacted to the latest tariff developments.
Australia’s stock market has dropped by 0.6%, as investors recognise that the new 15% global tariff will hurt its exporters.
But with mainland Chinese markets closed for the lunar new year, Hong Kong’s Hang Seng index has surged by 2.4%.
That follows analysis (see here) showing that China is one of the countries who should benefit most from the new global tariff.
Tony Sycamore, market analyst at IG, explains:
Even after President Trump’s swift response—announcing a new 10% global tariff (quickly raised to 15%) under Section 122 of the Trade Act of 1974, effective February 24, the net tariff on Chinese goods is still lower than it was before the Court ruling. Most estimates suggest that China will see a net reduction in tariffs of roughly 5–8 percentage points versus the pre-ruling IEEPA peak.
While it’s good news for China, the news isn’t so good for Australia, as Australia’s effective US tariff rate on many of its exports is rising from a 10% baseline to 15%—a 50% relative increase under the new temporary global surcharge announced by President Trump.
Bitcoin down 2.8%
This latest bout of trade war uncertainty has not helped the bitcoin price
Bitcoin is down 2.8% today at $65,734, having earlier dropped below $65k for the first time in two weeks.
US stock market futures down
US stock futures show that the S&P 500 share index is on track to drop by 0.55% when trading resumes in New York.
The narrower Dow Jones Industrial Average index is being called down 0.45%, while the tech-focused Nasdaq futures contract is down 0.65%.
Matt Britzman, senior equity analyst Hargreaves Lansdown:
Wall Street ended last week on a high after the Supreme Court struck down the Trump administration’s use of its preferred tariff powers, with investors quickly repricing the outlook for lower effective tariff rates.
That optimism is fading somewhat this morning, however, with US futures pointing lower as the dust settles and investors strap back in for another wave of tariff uncertainty.
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Chinese commerce ministry is urging Washington to lift its tariffs, saying it is making a “full assessment” of the supreme court’s tariff ruling.
The ministry argued that the US unilateral tariffs are not in the interests of any party, adding:
“There are no winners in a trade war and…protectionism leads nowhere.”
China, India and Brazil 'benefit most' from new trade regime
Donald Trump’s new 15% flat-rate tariff is a boost for China, India and Brazil, according to analysis from Global Trade Alert, a trade monitoring body.
Global Trade Alert have calculated that the shift away from the tariff regime before the supreme court ruling produces “clear winners and losers” among the top 20 exporters to the US.
Countries that faced steep IEEPA surcharges see large tariff reductions: Brazil (-13.6 pp), China (-7.1 pp), and India (-5.6 pp) benefit most, since the flat S122 surcharge replaces country-specific IEEPA rates that were far higher.
[S122 refers to section 122 of the US Trade Act of 1974, the legislation Trump is using for his new 15% tariffs].
US customs agency to stop collecting tariffs deemed illegal by Supreme Court on Tuesday
The US Customs and Border Protection agency said it will halt collections of tariffs imposed under the International Emergency Economic Powers Act at 12:01 a.m. EST (0501 GMT) on Tuesday, after the supreme court declared them illegal on Friday.
CBP has told shippers through a message on its Cargo Systems Messaging Service that it will de-activate all tariff codes associated with President Donald Trump’s prior IEEPA-related orders as of Tuesday.
With the dollar selling off, the pound has gained almost half a cent to $1.3523.
The euro’s up a similar amount, to $1.1822.
Introduction: Dollar and stocks decline after US Supreme Court hits Trump’s tariffs
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
We’re in a new phase of trade war uncertainty, after the supreme court blocked Donald Trump’s sweeping global tariffs last Friday.
With the president hitting back over the weekend, announcing a new temporary global tariff of 10%, then 15%, its clear that the White House is persisting with its policy of using trade levies to gain leverage over other countries.
So, as ING economists warn:
Announcements since the Supreme Court’s ruling strongly confirm that Trump has no intention of removing his “most beautiful word” from the English dictionary.
Uncertainty is back, and given the latest muscle-flexing by European leaders, the risk of escalation is now higher than it was a year ago.
The market reaction has been to sell the US dollar – it has fallen by 0.4% against a basket of other currencies today, adding to losses on Friday after the supreme court declared tariffs imposed under the International Emergency Economic Powers Act to be illegal.
US stock market futures are lower too, indicating we’ll see losses on Wall Street, while bitcoin has also weakened.
Last night, US Trade Representative Jamieson Greer insisted that deals made with other countries are still intact, and should be honoured.
Greer told CBS’s Face the Nation:
“We want them to understand these deals are going to be good deals.
“We’re going to stand by them. We expect our partners to stand by them.”
Greer also pledged that the new 15% global tariff was distinct from the bilateral agreements struck in the last nine months with about 20 countries.
That indicates that the deal announced by Trump and the UK prime minister, Keir Starmer, in May last year will continue to stand, rather than the UK’s tariff rising to 15%.
Although, as education secretary, Bridget Phillipson admitted on Sunday, UK businesses faced “uncertainty” after the latest developments.
The agenda
9am GMT: German IFO business confidence survey
11am GMT: Bank of England policymaker Alan Taylor giving a Fireside chat at Deutsche Bank
Noon GMT: Mexico’s Q4 2025 GDP report
1.30pm GMT: The Chicago Fed National Activity Index
3pm GMT: US factory orders for December
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