Is Starmer about to change his approach to the US?published at 14:26 British Summer Time 7 April

14:26 BST 7 April

Chris Mason
Political editor

Hello from the West Midlands. The prime minister will be giving a speech in the region shortly — his first major public intervention since President Trump’s announcement last week.

Keir Starmer writes in the Times today that "this is not a phase - the world has fundamentally changed".

If that is true, the key question it poses is whether the prime minister is willing to fundamentally change his approach.

His critics say his announcement today, which aims to help the car industry, amounts to tinkering; folks in government tell me it’s the first of several announcements to come.

Will he and the chancellor have to think beyond their current self imposed economic guardrails - not changing income tax, not borrowing in a way that breaks their so called fiscal rules for instance - if things really have fundamentally changed?

• He's just started speaking - you can watch it live at the top of the page, and we'll bring you key lines here as soon as we get them

Some more response to Trump's tariffs, this time from their northern neighbour.

The Canadian government has requested dispute consultations with the US at the World Trade Organization (WTO) over Trump's decision to impose a 25% tariff on cars and car parts from Canada, the international trade body says.

According to the WTO, Canada argues the tariffs are inconsistent with the obligations the US has under several provisions of the 1994 General Agreement on Tariffs and Trade (Gatt).

• Read more about how US car tariffs have left Canadian auto workers on edge

Donald Trump has just posted some more of his views on his Truth Social platform, telling his followers the US "has a chance to do something that should have been done DECADES AGO".

He calls on people to not be "weak" or "stupid", adding: "Don’t be a PANICAN (A new party based on Weak and Stupid people!)".

It is not exactly clear what he means by this new term, but it seems to be a new Trump-coined phrase to criticise Republicans who have concerns over the effects of his recent tariffs.

He has previously characterised members of his party who oppose his polices or leadership as being "Rinos" (Republican in name only).

"Be Strong, Courageous, and Patient, and GREATNESS will be the result!", the post concludes.

Image source, Getty Images

Peter Navarro - Trump's trade adviser - has been speaking to American news network CNBC.

Asked if the president is interested in countries trying to negotiate over tariffs, Navarro replies by saying they are seeing a "beautiful situation" with the stock market and prices since the tariffs were introduced.

He tells businesses not to panic about what they are seeing on the stock market - which as a reminder, opens in less than half an hour.

"Any discussion of recession seems silly," he adds. He repeats Trump's claim from this morning that oil prices are down.

But Navarro is pushed that the tariffs are "much higher" than anticipated.

Navarro says the methodology for calculating the tariffs was "methodologically sound".

What is the FTSE 100?published at 14:01 British Summer Time 7 April

14:01 BST 7 April

Simon Jack
Business editor

The FTSE 100 is the UK's biggest stock market index - a group of the 100 biggest publicly listed companies in the country.

Those companies were all put in a big bucket back in 1984 and given a certain weighting depending on their size.

Since then, companies have come and gone, there have been takeovers and mergers - but generally speaking the FTSE 100 contains 100 of the largest firms.

Basically, the stock market is a reflection of their total value over time. So, what the stock market tells you is how the value of the shares in those companies has changed - with a concentration on those biggest names.

A lot of people say that one of the problems with US stock market indexes in recent years is those few big tech companies have had an overwhelming influence on the whole thing.

But generally speaking, it's an indication of what our biggest companies are worth.

And when they go up, or down, it tells you something about the sentiment, whether their profits are likely to rise or fall in the future.

Nick Edser
Business reporter

Image source, Getty Images

It’s less than an hour now before the US markets open, and the expectations are that the downward slide in stocks will continue.

The futures markets – which give an indication of how the markets will perform – suggest the main US share indexes will all open 2-3% down.

Here’s a brief recap of what happened at the end of last week on Wall Street.

The S&P 500 index – which, as the name suggests, tracks the share prices of 500 US companies – fell nearly 6% on Friday to its lowest level for 11 months

The Dow Jones Industrial Average dropped 5.5%. The Dow looks at 30 large companies considered to be “blue chip” stocks, which means they have a solid track record in terms of their financial performance.

The Nasdaq index – which is dominated by tech firms – ended the day down 5.8%. The Nasdaq has now fallen 20% from its record closing high in December, and as such is now deemed to be in a bear market .

How does a stock market fall affect pensions?published at 13:45 British Summer Time 7 April

13:45 BST 7 April

Simon Jack
Business editor

There are two things to stress here: what happens in stock markets is not necessarily the same thing that happens in the economy. They can be linked, but they are exactly not the same.

Some people invest directly in shares - and this will definitely affect them.

These are some big falls, some of the biggest we've seen in a couple of days since the pandemic panic that gripped the market back in 2020.

The other way people are exposed to this is in their pension funds.

Now pension fund investing is a long-term game. Not all your money will go into shares, some will go into government bonds.

And the closer you are to retirement, the more weighting you will have in things like cash and bonds - so this will affect you less.

There are also two kinds of pension funds:

• defined benefit, where you get a promised percentage of your salary at retirement
• defined contribution, where your pension pots value will rise and fall with financial markets

So yes, people's pensions are exposed. But we've seen things like this before and during the pandemic.

The warning sign flashing here is not the value of your pension pot - it's what is going to happen to the economies in which we all live and work.

A lot of people are saying the chance of recession in both the US, UK - and even globally - have gone up a notch, which has implications for things like jobs and wages.

Image source, Getty Images

Volkswagen's Audi is holding back cars that arrived in US ports after 2 April because of the newly imposed 25% tariff on cars, Reuters news agency reports.

US President Donald Trump confirmed the 25% tariff on last Wednesday before it came into effect almost immediately.

A spokesperson says today that the carmaker has around 37,000 vehicles, sufficient for approximately two months of sales, in its US inventory - meaning its cars will continue to be available for customers.

Jaguar Land Rover also said following the announcement last week that it would "pause" shipments to the US in April.

Nissan, on the other hand, said it would consider shifting some of its production to the US.

James FitzGerald
BBC News reporter

Image source, Getty Images

A billionaire backer of Donald Trump has urged the US president to pause his recently announced trade tariffs, or risk "a self-induced, economic nuclear winter".

Amid market turmoil, hedge fund manager Bill Ackman said the president should take three months to allow countries to renegotiate their trading relationships with the US.

On Monday, Ackman's warning was echoed by another prominent Wall Street figure, with JPMorgan Chase chairman Jamie Dimon saying that Trump's tariffs risked pushing up prices for Americans.

Despite the shockwaves, the American president has defended his new import taxes, saying "sometimes you have to take medicine to fix something".

• In a recent post on X, Ackman writes: "I would love to be proven wrong and watch this approach to tariffs and/or their resolution be enormously beneficial to our country and the global economy."

You can read on in our news article.

Image source, Reuters

What’s happened?

Trump announced new US tariffs on Wednesday - increasing the cost of bringing goods into the country.

Many countries have threatened retaliation - meaning they will raise the cost of bringing US goods into their countries.

The value of stock markets across the world has fallen since - meaning investors think this will be bad for business.

Why did Trump do this?

The US currently buys more physical goods from other countries than it sells. Trump claims this is unfair and bad for the country. The tariffs are intended to reduce this imbalance and bring more jobs to the US.

But most economists disagree with Trump’s reasoning. Tariffs make it harder to trade across borders, so experts predict such a large increase in them will act like a drag on economic growth. They also say the uncertainty about what Trump will do next - raise tariffs or reduce them - and how other countries will respond, is making it harder to do business.

Tell me more…

We've got an explainer on what Trump announced, what tariffs are, and how this could impact consumers.

Wondering if changes on stock markets affect you - we've got you covered.

And if you really want to go big picture, the BBC's economics editor Faisal Islam has taken a deep dive into the ideas that underpin this debate

Faisal Islam
Economics editor

There are a number of things that could determine markets in the next 48 hours: a central bank intervention, Trump delaying the so-called “reciprocal” tariffs on Wednesday, the US Treasury Secretary resigning, and the EU releasing its counter-tariffs.

The longer the uncertainty, the higher the risk of an accident somewhere else in the financial system by someone caught off guard by the sharp share price falls. In an ominous sign, corporate credit spreads are now beginning to widen.

The fundamental issue here is no one really knows how this winds back. It is all on one man, and who has his ear.

As one G7 negotiator told me yesterday, they did not know whether senior officials really know the president’s intentions. Does anyone?

Simon Jack, our business editor, is currently live on the BBC news channel answering audience questions about Trump's tariffs and the impact on the stock market that we're seeing.

You can follow along by pressing watch live on the stream at the top of this page.

Mitchell Labiak
Business reporter

Probably — although not right away.

Retailers who are buying fuel today will get it at a lower price than yesterday.

Simon Williams, head of policy at RAC, says if those prices remain as they are and retailers do the “right thing”, petrol in the UK should fall from £1.36 a litre on average to around £1.30 while diesel should fall from £1.43 to around £1.35. He says drivers may see this difference over the next couple of weeks as retailers restock their pumps.

However, retailers have been accused of not passing on savings quickly or fully.

The competition watchdog is currently probing the big supermarkets, having found evidence of “rocket and feather” fuel pricing. This is when prices rise like a rocket (such as in the run up to and aftermath of Russia’s invasion of Ukraine) but fall like a feather.

Steve Rosenberg
Russia editor

Image source, Getty Images

Russia may, so far, have escaped Donald Trump’s sweeping tariffs, but it’s experiencing the consequences of post-tariff turmoil on global markets.

Plunging oil prices are a big concern for an economy heavily reliant on its energy exports, including to finance its war in Ukraine.

“We are, of course, following the situation closely,” President Putin’s spokesman Dmitry Peskov told reporters today.

“It is extremely turbulent, tense and emotionally charged. It’s linked to America’s decision to impose tariffs on most countries.”

Peskov said the Russian authorities “are doing and will do everything to minimise the consequences of this international economic storm.”

Such concern is echoed in the Russian media.

“The fall in the energy markets will be very painful for Russia,” wrote today’s Nezavisimaya Gazeta newspaper.

“In spring 2025 the Russian economy was already somewhere between decline and recession.

Now a global trade crisis and a fall in demand in China could make the situation even worse for our economy.”

Image source, Reuters

In his latest post on Truth Social, US President Donald Trump writes that China is "not acknowledging my warning for abusing countries not to retaliate".

He calls out China for imposing an additional 34% tariff on goods from the US, and refers to the sharp drops across Asian stock markets on Monday, saying: "They’ve made enough, for decades, taking advantage of the good ol’ USA!"

The "long time abused USA is bringing in billions of dollars a week from the abusing countries on tariffs that are already in place," he says.

He adds that oil prices are going down, which we covered earlier, and further claims that interest rates and food prices are dropping, though we have not verified those claims.

Irish Trade Minister Simon Harris says he believes the majority of the EU wants to negotiate with the US, speaking to reporters ahead of a meeting of EU trade ministers in Luxembourg today.

"[They do] not accept that where we are now is the inevitable outcome... and I really think economics is on our side here," he tells the BBC.

He adds that it is important for Europe to show "unity" and to respond in a "calm and measured way" by taking it "step-by-step".

His French counterpart Laurent Saint-Martin says the aim of their meeting is to negotiate a deal ,but while they are against a trade war, "of course the EU must react, firmly and proportionally".

"We must not exclude any option on goods, on services... and open the European toolbox, which is very comprehensive and can also be extremely aggressive," he explains.

The falls on the London stock market today have pushed the FTSE 100 index to its lowest level for a year.

However, after sinking by about 6% at the start of trade, the index has started to recover as the morning has progressed, and is now down 4%.

Aerospace group Melrose Industries is the biggest faller on the index, down 6.6%. Shares in oil giant Shell have fallen 5.2% as the price of crude continues to slide.

Earlier on Monday not a single one of the 100 shares in the index had risen, but now a few have. Take a bow building firm Taylor Wimpey, gambling group Entain, and Lloyds Banking Group, who have all edged up.

Image source, gett

There are few areas of the financial markets that have not been touched by the turbulence triggered by the US tariffs, and the currency markets are no exception.

Currencies such as Japan’s yen and the Swiss franc, which are traditionally seen as “safe havens” in times of uncertainty, have strengthened against the dollar.

After falling 2% against the yen last week, the dollar dropped a further 0.8% against the Japanese currency on Monday.

The dollar has also hit a six-month low against the Swiss franc, and fell more than 1% on Monday.

The US dollar itself has usually been considered a safe haven itself, but the uncertainty triggered by the tariff announcement saw it fall last week against a basket of currencies of its largest trading partners.

Dearbail Jordan
Business reporter

The 13.2% drop on the Hang Seng is among the worst one-day falls in the Hong Kong stock market index’s history.

It is surpassed only by the likes of the infamous Black Monday crash in 1987, which was sparked by US stock markets but sent the Hang Seng down 33.3%.

The Hang Seng also plunged by 21.7% on one day in June 1989 after the Tiananmen Square protests in China were violently extinguished.

So, Monday’s drop is shocking.

However, one thing to bear in mind is that the Hang Seng was closed on Friday - today was the first time that markets could react to China hitting back at Trump’s tariffs with its own 34% import tax on US products.

“Asia is lumping two horrible days on the market into one,” says Russ Mould investor director at AJ Bell.

Although he also says Asia “arguably has the most to lose from Trump’s tariffs”, because its countries have “thrived from selling goods to the West, with places like the US having been hungry to access cheap labour”.

It's not clear where US President Donald Trump's policies are going to go, chief economics commentator at the Financial Times Martin Wolf says. His guess is that at the end of this tariffs "will remain higher than they have been for a long time".

Speaking to our colleagues on BBC Radio 4's Today programme this morning, he says: "Donald Trump has injected massive uncertainty into the world economy – uncertainty is very bad for markets and very bad for investors."

"The market deciding to respond to what has happened both the incredibly high tariffs and the uncertainty by marking down future prospects seems to me completely reasonable."