Henry Zeffman
Chief political correspondent

As the trade war between China and the US intensifies, on the other side of the world the UK continues to pursue its own strategy of seeking a bilateral deal with President Trump.

For weeks in the run-up to the tariffs being imposed by the US, the UK sought to negotiate an economic agreement with Washington which would, among other things, mean the tariffs being reduced.

Yet in the days before Trump’s big announcement last week it became clear that the president was set on imposing blanket global tariffs.

The government still hopes that deal could be signed.

In fact, those close to the negotiation say it is essentially there, focusing on technology co-operation but covering various other parts of the economy too. What they admit remains something of a mystery is when, or whether, President Trump might actually sign it.

The longer he does not, the more questions you will hear here in the UK about the government’s approach.

Trump's game of chicken leaves world guessingpublished at 07:33 British Summer Time 8 April

07:33 BST 8 April

Anthony Zurcher
North America correspondent, Washington DC

Image source, Getty Images

A day before Donald Trump's "reciprocal" tariffs are scheduled to kick in, the US president appears locked in a high-stakes game of chicken, with the world's economy hanging in the balance.

So if this is about the start of broader systemic change – what is the desired end goal worth potentially tanking the global economy?

One theory is that Trump has a plan with several of his top advisers – the "Mar-a-Lago accord", it is called – with the ultimate goal of compelling America's trading partners to weaken the US dollar on the international currency exchange.

Such a move would make American exports more affordable to foreign markets and diminish the value of China's large reserves of US currency.

That's just one of the possible explanations for the current stock market mayhem that Trump has purposefully instigated – one that many other prominent economists warn is risky. It is far from the only one.

Is it all a negotiating tactic, or is he playing a longer game aimed at permanently restructuring the global economy and America's place in it?

Image source, Getty Images

On Monday, US President Donald Trump threatened additional tariffs on Chinese goods.

Writing on Truth Social, external, he said that unless China withdrew the 34% retaliatory tariff announced by Beijing last week, he would impose an additional 50% tariff on Wednesday.

Trump had already imposed a 20% tariff on China before announcing a further 34% rate last week. An additional 50% would take the total tariff rate on China to 104%.

He also opened the door for negotiations with other countries, which included meeting Israeli Prime Minister Benjamin Netanyahu in Washington yesterday, but said he was not considering pausing new tariffs.

Asked directly about a potential pause, he told reporters in the Oval Office: "We're not looking at that. We have many, many countries that are coming to negotiate deals with us, and there are going to be fair deals."

After a more positive performance from Asian markets, there are indications that European shares will also see a rebound when trading starts at 08:00 BST this morning.

Rachel Winter, a partner and investment manager at Killik & Co, tells the BBC's Today programme that "it’s looking to be very much a better day".

The futures market - which gives an indication of how markets will perform - suggests the UK's FTSE 100 share index will open about 2% higher.

However, the futures market can be volatile, so can change quite a bit before the market opens officially.

Hong Kong's Chief Executive John Lee says President Trump's "reckless imposition" of tariffs has far-reaching effects on global trade.

Lee says the levies "will disrupt the world economic and trade order, bring great risks and uncertainties to the world".

He adds that Hong Kong will look to deepen trade with South East Asia and the Middle East, and sell more to mainland China in response to tariffs.

Mariko Oi
Asia business correspondent

Image source, Reuters

After three days of a sharp sell-off, Japan’s Nikkei 225 index opened 6% higher today.

Hong Kong's Hang Seng was up about 2% - after plunging yesterday by more than 13%, its biggest fall in decades.

The markets in South Korea and Australia have also edged up - while in Taiwan and Singapore there have been more losses.

The key index in mainland China, the Shanghai Composite, was broadly flat in morning trading.

One trader described what was happening across Asia as a "natural market bounce following Monday's calamities".

Chris Mason
Political editor

Image source, Getty Images

As if the economic picture in the UK wasn't shaky already, it has now got shakier still.

The cost of living is continuing to bite for many and people will worry about the prospect of recession.

It is the last thing the government could do with. It is the last thing millions of families could do with.

New polling for More In Common suggests two-thirds of people in the UK are worried about America's tariffs, with just over half fearing it will make cost-of-living pressures even greater.

And nearly twice as many people in the UK would support the government retaliating with its own tariffs on America as those who oppose the idea.

For now, the prime minister and senior ministers are doing what plenty of governments around the world are doing: scrambling to work out how to respond and hitting the phones to ask each other just that.

China is not backing down following Trump's threatpublished at 06:12 British Summer Time 8 April

06:12 BST 8 April

Stephen McDonell
China correspondent, Beijing

Image source, Getty Images

Beijing has indicated that it will hold firm in the face of renewed threats from Donald Trump.

China’s Commerce Ministry said that any more tariffs from the US would trigger extra “countermeasures” targeting American goods.

In a written statement it accused the Trump administration of blackmail and said that “if the US insists on this way, China will fight it to the end”.

It also ridiculed Donald Trump’s claim that his tariffs are “reciprocal” saying that they were “groundless” and “a typical unilateral bullying practice”.

It seems hard to believe that Donald Trump would have really expected China to reverse last week’s “countermeasures” in the face of his promised next round of retaliation.

Apart from losing face, if the Chinese government is describing Donald Trump as a bully, it is hardly going to back down to this person.

By taking a firm stand against the Trump-instigated global trade chaos, China may also hope to attract not only international political support but also extra trade volumes from new partners, which might make up for some of the loss of sales into America.

But the Communist Party doesn’t really need a trade war now. It comes at a time of high economic pressures at home.

Policymakers had already been struggling to increase increase domestic consumption, with a sluggish economy reeling from years of a major property crisis and persistent youth unemployment. Now it is facing a potential collapse in trade with the world’s other superpower.

Still, the Chinese Communist Party has sent a confident message to the Chinese population today, in the form of an editorial in the mouthpiece People’s Daily newspaper.

“China has the courage and confidence to deal with the impact... it is fully capable of meeting these challenges,” it said.

Image source, Getty Images

Good morning to our readers in Europe and the UK. If you're just joining us, here are the latest developments:

• US President Donald Trump has threatened China with an extra 50% tariff on goods imported into the America if Beijing does not withdraw its plans to retaliate
• China's commerce ministry has said it will never accept the "blackmail nature" of the US and vowed to fight against tariffs "to the end".
• Several Chinese state-owned firms have pledged to support financial markets as trade tensions with the US escalate. China's financial regulator also plans to increase the proportion of insurance funds investing in the stock market
• Analysts have said China is unlikely to back down as it will not want to "appear weak", even though the proposed tariffs could cripple the Chinese exports sector
• Most Asian markets opened higher on Tuesday, recouping huge losses seen a day earlier, although Taiwan saw a further fall

No end in sight for tit-for-tat tariffspublished at 05:42 British Summer Time 8 April

05:42 BST 8 April

Peter Hoskins
Business reporter, Singapore

Shortly after coming back to the White House Donald Trump returned to one of his favourite themes - lashing out at China over trade. But his Chinese counterpart Xi Jinping is showing no signs of backing down.

In February, Trump imposed a new 10% tariff on all goods from China.

Beijing immediately hit back with a number of countermeasures, including duties on US coal, liquefied natural gas and agricultural machinery.

The following month, Trump doubled the tariff on Chinese goods to 20%.

Again, China retaliated with more tariffs of up to 15% on key US agricultural products and tightened controls on American firms operating in the country.

Last week, on the US president's so-called Liberation Day, he unveiled plans to raise the import tax on Chinese goods to 54%, although some items, like pharmaceuticals and computer chips, were exempted.

Yet again, Beijing responded with new measures, including additional export controls on rare earth minerals and suspended imports of more farm goods from some US firms. It also filed a lawsuit with the World Trade Organization, added 27 American firms to lists of companies facing trade restrictions and started an anti-monopoly investigation into DuPont China Group Co.

On Monday, Trump threatened a massive hike to tariffs, which if actually imposed would mean almost all Chinese imports will be subject to a 104% tariff.

China has said it will "fight to the end".

All of which suggest that we probably won't see an end to this trade war any time soon.

Bangladesh's interim government has formally asked the US to pause its tariff plans for three months.

This will allow the South Asian country to "smoothly implement its initiative to substantially increase US exports to Bangladesh," the office of interim leader Muhammad Yunus said.

The office added that it has already agreed to buy more US goods including energy, cotton and wheat.

Bangladesh is the third largest supplier of clothing to the US, after China and Vietnam. It faces a 37% levy on its exports later this week.

Image source, Getty Images

Is the US running a $1tn deficit with China?published at 05:17 British Summer Time 8 April

05:17 BST 8 April

By Gerry Georgieva

US President Donald Trump has claimed several times that the United States is running a $1tn trade deficit with China.

But we can’t find any evidence for this.

The US does run a trade deficit with China, meaning that it imports more in goods from that country than it exports to it. But the figure was just over $295bn for 2024, external.

Globally, in 2024, China exported nearly $1tn more goods, external than it imported - so it’s possible that Trump may have been mistakenly referring to this figure.

Vietnam's Prime Minister Pham Minh Chinh says the country will buy more goods from the US, including products used for security and defence.

He added that it will also seek for faster deliveries of America-made planes.

Vietnam is set to be one of the hardest hit by Trump tariffs - it faces a rate of 46%.

It has a large trade deficit with the US and has been a beneficiary of firms moving factories out of China to avoid measures announced during his first term in office.

Read more on how Pham is also trying to take a diplomatic approach with the US - including golfing with Trump.

Image source, Getty Images

Thailand's stock exchange, which was closed yesterday for a national holiday, has seen stocks fall more than 4% when it opened this morning.

The stock exchange has banned short-selling this week in anticipation of the chaos that hit global markets in the wake of Trump's tariff announcements. It has also lowered the ceiling and floor limit on stocks from 30% to 15%.

Thailand has been hit by a 36% tariff, among the highest in the region.

Thai Prime Minister Paetongtarn Shinawatra has said that she was seeking negotiations with the US. Authorities have also pledged to increase imports of energy, aircraft, and agricultural products from the US.

Annabelle Liang
Business reporter, Singapore

Image source, Getty Images

The numbers are eye-watering - with just over 24 hours left until tariffs are due to be imposed.

China was already facing a 54% levy on its imports to the US. Trump has threatened to almost double this, in response to Beijing's plan to retaliate.

The war of words is also heating up. But China is unlikely to back down on both fronts, even though tariffs could cripple its exports sector, according to analysts.

"I believe that China means it when it says it will fight to the end. It will be tit-for-tat if the US really raises the tariffs again, China will match it," said Dan Wang from the Eurasia Group consultancy.

This is despite the fact that proposed tariffs will "wipe out the entire profit margin for [the Chinese] export sector".

Alfredo Montufar-Helu from The Conference Board think tank believes it would be "a mistake to think that China will back off" as Beijing will not want to "appear weak".

"Unfortunately, we've now reached an impasse that will likely lead to long term economic pain," Mr Montufar-Helu said.

Ottilie Mitchell
Reporting from Sydney, Australia

Image source, Getty Images

The US Commerce Secretary has defended the country's decision to impose tariffs on a group of uninhabited islands, which are populated only by penguins and seals.

The imposition of tariffs on the Heard and McDonald islands was meant to close "ridiculous loopholes" and would prevent other countries from shipping through the islands to reach the US, Howard Lutnick told the BBC's US partner CBS.

Authorities in Australia reacted with surprise last week when they found out about the tariffs on the island, which sits 4,000km (2,485 mi) from Australia.

Its trade minister Don Farrell told the Australian Broadcasting Corporation the tariffs were "clearly a mistake" and indicated a "rushed process".

• Read more: US defends tariffs on remote island of penguins and seals

Indonesian shares have plunged by more 9% as markets reopened after an extended holiday.

The slide triggered a 30-minute halt to trading.

The country's currency, the rupiah, also fell to a record low against the US dollar as traders reacted to the global market turmoil triggered by Trump's tariffs, which included a plan for 32% tariff on Indonesian products.

Indonesian markets reopened on Tuesday for the first time since 27 March, and are catching up with global market moves.

Hong Kong's leader John Lee has said the city will look to deepen trade with South East Asia and the Middle East in response to US tariffs.

He also urged businesses to increase sales to mainland China.

Lee, in a speech on Tuesday, called tariffs a "reckless" act and "ruthless behaviour" by the Trump administration.

His comments come as the benchmark Hang Seng index is trading around 2% higher as it looks to recoup huge losses seen a day earlier.

Image source, Getty Images

Japan has nominated Economy Minister Ryosei Akazawa to head trade negotiations with the US.

Trump and Japan's Prime Minister Shigeru Ishiba had agreed to start bilateral talks during a phone conversation on Monday. Trump has put Treasury Secretary Scott Bessent and Trade Representative Jamieson Greer in charge of these negotiations.

To recap, Trump has imposed a 25% levy on auto imports from Japan and a so-called reciprocal tariff of 24% on other Japanese goods.