Tariffs live: US central bank threatens to step in as Trump still defends levies

Rachel Reeves has said that the British Government is “resolved” to do everything it can to secure the “best deal possible” with the US on tariffs.

Before Trump’s 90-day pause, the UK was faced with a 10 per cent rate seen as favourable compared with others like the EU, which faced a 20 per cent tariff.

Now, negotiations are ongoing for the future of the “special relationship” with hopes a breakthrough can be made in the coming days.

Reeves said: “We continue to engage with our counterparts in the United States and of course we want to secure the best deal possible for British jobs and British industry. And we are absolutely … resolved to do everything we can.

“But, at the same time, we also want to improve trading relations with other countries around the world.”

But Kevin Hassett, senior economic adviser to Trump, previously suggested the blanket 10 per cent tariff rate was likely to be a “baseline” and anything below this would be “extraordinary”.

Director of the Chinese Communist Party Wang Yi has blasted tariffs that have led to a “chaotic” international situation.

He met with Rafael Mariano Grossi, Director General of the International Atomic Energy Agency in Beijing on Friday to discuss China’s response to Trump’s decision to hike duties on Chinese goods to 145 per cent.

In a post on X, the Chinese ambassador to the US, Xie Fen, relayed their conversation.

He said Mr Grossi was told: “The current turbulent and chaotic international situation is largely caused by a certain major power clinging to the belief in the supremacy of strength, prioritizing self-interest, and engaging in unilateral bullying.

“China stands up to oppose hegemonism, not only to safeguard our legitimate rights and interests, but also to protect the common interests of the international community, and to prevent a return to the jungle world where the strong prey on the weak.

“The wheel of history cannot be turned back.”

A survey of more than 15 countries including key US trading partners has suggested confusion surrounding Donald Trump approach to tariffs.

“We really don’t know what the Trump administration wants,” one diplomat from an Asian country, who is close to the negotiations told Politico.

“We’ve been told literally nothing,” said another official representing an Asian country.

The confusion they said suggests a deal-making process that’s “reactive, with no clear direction.”

It came after the US President told reporters: “When people understand what we’re doing, I think the dollar will go way up.

“The bond market’s going good. It had a little moment but I solved that problem very quickly.”

China has said it will ignore further levies by US president Donald Trump after Beijing hiked levies on American goods to 125 per cent.

“Even if the US imposes higher tariffs, it would no longer make economic sense and ultimately go down as a joke in world economic history,” China’s finance ministry said yesterday.

“Given that it’s already impossible for the Chinese market to accept US imports at the current tariff level if the United States imposes further tariffs on Chinese products, China will ignore it,” it said.

President Donald Trump had perhaps one of the biggest setbacks for his agenda this week. After a whipsaw performance in overnight markets on Tuesday evening, Trump blinked and announced a 90-day pause on his “reciprocal tariffs.”

Trump himself admitted this came after markets got “a little queasy.” It also came after JPMorgan Chase CEO Jamie Dimon, arguably the most respected executive on Wall Street, warned that a recession was likely. It turns out that even as the Republican Congress and the courts largely stand by, one thing can grind Trump to a halt: the bond market, which went haywire on Tuesday evening.

But Trump did not just make Wall Street sick. The University of Michigan’s survey of consumers found that consumer sentiment dropped for the fourth straight month in a row, 30 percent since December 2024.

And this does not erase the fact that Trump still slapped on 145 percent duties on China and an across-the-board tariff of 10 percent for other countries.

Senior Senate Democrats have written a letter asking the Securities and Exchange Commission (SEC) to investigate whether president Donald Trump engaged in insider trading and market manipulation.

Mr Trump sent financial markets into a tailspin by announcing sweeping import taxes on dozens of trade partners last week, before rolling them back to 10 per cent last Wednesday for 90 days.

The call for investigation was prompted by Mr Trump’s statement on Wednesday when he claimed that it was a “great time to buy” stocks. Shortly after, he paused most of the tariffs imposed last week.

“We urge the SEC to investigate whether the tariff announcements, which caused the market crash and subsequent partial recovery, enriched administration insiders and friends at the expense of the American public and whether any insiders, including the president’s family, had prior knowledge of the tariff pause that they abused to make stock trades ahead of the president’s announcement,” said the letter.

House minority Leader Hakeem Jeffries said earlier that Democrats “need to get to the bottom of the possible stock manipulation that is unfolding before the American people, including what if any advanced knowledge did members of the House Republican Conference have of Trump’s decision to pause the reckless tariffs that he put into place?”

“There are several members of Congress who will be aggressively demanding answers and transparency, particularly as it relates to the stock purchase decisions that may have occurred over the last few days.”

The Federal Reserve has warned it “would absolutely be prepared” to use its firepower to stabilise financial markets if the conditions were to worsen due to Donald Trump’s “reciprocal” tariffs on dozens of nations.

Mr Trump sent financial markets into a tailspin by announcing sweeping import taxes on dozens of trade partners last week, before rolling them back to 10 per cent last Wednesday for 90 days.

Susan Collins, president of the Boston Fed, said: “Markets are continuing to function well, and we’re not seeing liquidity concerns overall”. However, she added that the central bank “does have tools to address concerns about market functioning or liquidity should they arise”.

She told The Financial Times: “We have had to deploy various tools quite quickly in the past. We would absolutely be prepared to do that as needed.”

US president Donald Trump yesterday said that 10 per cent is a tariff floor, or pretty close, and that there could be a couple of exceptions.

Mr Trump, who said he was comfortable with the tariffs on China, has suggested that a deal with Beijing could be in the offing, too, heaping praise on president Xi Jinping despite their differences over trade.

But there were no signs that the world’s two largest economies were ready to back down.

“The president made it very clear: When the United States is punched, he will punch back harder,” White House press secretary Karoline Leavitt told reporters.

President Xi Jinping told Spain’s prime minister that China and the EU must join together in defending globalisation and opposing “unilateral acts of bullying”, in a jab at US president Donald Trump.

Mr Xi, in his first public comments on the issue since Mr Trump launched his tariff offensive last week, said there could be “no winners” in any trade war, and he said the EU had a key role to play in ensuring global economic stability.

China has always regarded the EU as an important pole in a multipolar world, and is one of the major countries firmly supporting the EU’s unity and growth,” Mr Xi told the Spanish prime minister.

“China and the EU should fulfill their international responsibilities, jointly safeguard the trend of economic globalisation and the international trade environment, and jointly oppose unilateral acts of bullying,” Xi added.

US president Donald Trump has insisted that his policy was “doing really well” despite China hiking levies on American goods to 125 per cent in a tit-for-tat response amid the ongoing trade war between the two biggest economies.

China’s tariff hike, hitting back against Trump’s decision to hike duties on Chinese goods to 145 per cent, will come into effect today.

“When people understand what we’re doing, I think the dollar will go way up,” he told reporters, downplaying the market turbulence.”The bond market’s going good. It had a little moment but I solved that problem very quickly.”