Trump hits US trading partners with sweeping new tariffs

Good morning and welcome back to FirstFT Asia. In today’s newsletter:

• Trump escalates his trade war

• Nintendo’s pricey Switch 2

• Jardine Matheson declares a strategic shift

US President Donald Trump just announced steep tariffs on the country’s major trading partners. Here’s what to know.

‘Reciprocal tariffs’: The US will impose so-called reciprocal tariffs on China of 34 per cent and hit the EU with a levy of 20 per cent. Trump also announced a universal 10 per cent tariff on all countries.

“For decades our country has been looted, pillaged and raped,” Trump told an audience at the White House that included cabinet members and carworkers. “It’s not going to happen any more.”

Vietnam, Taiwan, Japan and Cambodia were among other countries that would face steep tariffs, Trump said.

US officials said Mexico and Canada would for now avoid the US’s reciprocal tariffs, and would instead continue to have the levies Trump applied to their goods over border security and fentanyl issues. Tariff-free trade remains in place for all goods that comply with the terms of the 2020 USMCA trade agreement.

Market reaction: Apple and Nvidia shares dropped about 5 per cent and 2 per cent, respectively, in after-hours trading as Trump announced the tariff on China and a 32 per cent levy on Taiwan. The two companies, along with other large US tech groups, are heavily dependent on Taiwan Semiconductor Manufacturing Company, which produces most of the world’s most advanced semiconductors. 

US stock futures fell, rapidly reversing earlier gains, after the tariffs were unveiled. Contracts tracking Wall Street’s S&P 500 fell 1.7 per cent, while those tracking the tech-heavy Nasdaq 100 fell more than 2 per cent.

Follow our live blog as the world reacts to Trump’s escalating trade war.

• Trump tariff tracker: As the president launches a trade war, follow the latest data on imports, exports and trade balances.

For more analysis, sign up for our Trade Secrets newsletter if you’re a premium subscriber or upgrade your subscription. Here’s what else we’re keeping tabs on today:

• Economic data: Australia reports February job vacancies. S&P Global services PMI is due for Japan, China and Australia.

• Nato: Foreign ministers gather in Brussels for a two-day meeting.

• EU-Central Asia summit: The first of its kinds meeting between the EU and the five countries of Central Asia begins will be held in Samarkand, Uzbekistan.

Five more top stories

1. The White House is close to endorsing a deal for US investors to buy TikTok’s American operations, wresting control of the popular video app from its Chinese owners. The plans come ahead of a deadline for a US law on April 5 that would ban the app in the US unless Beijing-based parent ByteDance sells it to non-Chinese entities. Here are the investors in the potential transaction.

2. Net interest margins at China’s biggest lenders have fallen to their lowest levels on record, a Financial Times analysis shows. The recent decline in the key profitability indicator comes as a slowing economy and an official push to boost credit weigh on the country’s banking sector.

3. Elon Musk’s prominent role in the Trump administration was in fresh jeopardy yesterday, after the billionaire’s unpopularity was seized upon by Democrats to clinch a crucial state supreme court race. The president has told confidants that Musk’s position as head of the so-called Department of Government Efficiency could be terminated early, according to a report by Politico.

• Tesla’s brutal quarter: The EV maker’s deliveries tumbled in the first three months of this year, marking its worst quarter since 2022. However, shares rose on the report that Musk could leave the Trump administration.

4. Nintendo’s long-awaited Switch 2 console will go on sale on June 5 at a starting price of $449.99 in the US. The cost is near the top end of analyst expectations, reflecting fears that supply chains could be impacted by Trump’s sweeping levies on trading partners. Here’s how game experts reacted to the Switch 2 launch.

5. Danish shipowner AP Møller-Maersk has acquired a railway connecting the ports at either end of the Panama Canal. The deal loosens US control of the train link just as Trump seeks to assert Washington’s influence in the Central American country.

The Big Read

Rather than fight against Donald Trump’s crackdown, legal firm Paul Weiss decided to cut a deal with the White House that sent shockwaves through the US legal establishment. The move has highlighted a culture clash within many of the larger law firms, especially those with links to Wall Street. Here’s how Trump is exploiting Big Law’s growing identity crisis.

We’re also reading . . . 

• Myanmar earthquake: The military junta’s response to the disaster demonstrates its vulnerability four years after seizing power in a coup.

• DNA and inequality: If society is shot through with genetic influences, writes Anjana Ahuja, how should social inequality be addressed?

• War in Ukraine: Residents who fled Russian-occupied areas now fear they may never return, as the US embraces Moscow’s land demands in peace talks.

Chart of the day

Jardine Matheson is stepping back from day-to-day business after the storied Anglo-Asian conglomerate declared it would be an “engaged long-term investor” and not an owner-operator of assets. The shift raises the question of how Hong Kong-based Jardines will maintain its distinctive culture — shaped by the influence of the Keswick family over many years — as it slims down the controlling layer at the top.

Take a break from the news . . . 

Minecraft is, by a very long way, the best-selling video game of all time. Since its launch in 2011 it has sold 300mn copies and has players in every country, including Antarctica and Vatican City. With a film due for release this week, Tom Faber charts the rise of this simple but compelling game.