Trump tariffs live: China hits US with huge 34% tariff after FTSE drops in market meltdown

Canada’s total employment fell and the unemployment rate rose in March, new official data showed, as the uncertainty around US tariffs and their subsequent implementation forced companies to pause hiring and spurred some layoffs.

The country shed a net 32,600 jobs last month, in what marks the first decrease in more than three years. This was driven by a steep decline in full-time work, Statistics Canada said.

The employment decline followed largely flat job growth in February and a robust gain of 211,000 new jobs from November to January. The unemployment rate rose to 6.7 per cent in March from 6.6 per cent a month earlier.

“The wheels may be starting to fall off the Canadian labor market,” Andrew Grantham, senior economist at CIBC Capital Markets, wrote in a report. Analysts polled by Reuters had forecast a net job gain of 10,000 people and had estimated the unemployment rate to rise to 6.7 per cent.

The US economy added far more jobs than expected in March, prior to Donald Trump’s tariffs – which is likely to test the American labour market’s resilience in the months ahead.

The US Labour Department’s closely watched employment report on Friday showed nonfarm payrolls – which excludes those in agriculture, private households, and not-for-profits – increased by 228,000 jobs last month, after a downwardly revised 117,000 rise in February.

Economists polled by Reuters had forecast payrolls advancing by 135,000 jobs after a previously reported 151,000 rise in February. Estimates ranged from 50,000 to 185,000. Part of the rise in payrolls was a rebound after freezing temperatures curbed activity in January and February.

“This is a drop of good news in a sea of uncertainty, a footnote given the barrage of activities this week,” said Olu Sonola, head of US economic research at Fitch Ratings. “However, this is looking in the rear-view mirror, next month’s jobs report will be more consequential.”

Donald Trump has said Americans may feel “some pain” because of tariffs, but he has also said the long-term goals – including getting more manufacturing jobs back to the United States – are worth it. On Thursday, he likened the situation to a medical operation, where the US economy is the patient.

“For investors looking at their portfolios, it could have felt like an operation performed without anaesthesia,” Brian Jacobsen, chief economist at Annex Wealth Management, told Reuters.

But Jacobsen also said the next surprise for investors could be how quickly tariffs get negotiated down. “The speed of recovery will depend on how, and how quickly, officials negotiate,” he said.

After opening 3 per cent lower today, the tech-heavy Nasdaq has dropped more than 20 per cent from its all-time closing high touched in December – putting it on course to confirm a bear market.

Donald Trump has claimed that China “played it wrong” after Beijing retaliated against new US tariffs, unveiling countermeasures that included additional duties of 34 per cent on all US goods.

“China played it wrong, they panicked – the one thing they cannot afford to do!” Mr Trump wrote in all caps in post on his social media platform.

Earlier, the US president wrote, also in all caps: “To the many investors coming into the United States and investing massive amounts of money, my policies will never change. This is a great time to get rich, richer than ever before!!!”

The three major markets in the United States have all opened with significant losses following what marked their biggest one-day drop since March 2020.

The S&P 500 was down 2.77 per cent shortly after opening, while the Nasdaq was 3.2 per cent lower than the previous close, and the Dow Jones down 2.58.

As global markets roil in the wake of Donald Trump’s global tariffs, investment bank JP Morgan has said it now sees a 60 per cent chance of the global economy entering recession by year end – up from 40 per cent previously.

In a note titled, “There will be blood,” chief economist Bruce Kasman said the so-called “Liberation Day” tariffs amount to the largest tax hike since 1968.

“The effect of this tax hike is likely to be magnified – through retaliation, a slide in US business sentiment, and supply chain disruptions. The shock is likely to be only modestly dampened by the flexibility tariff hikes afford for further fiscal policy easing,” Mr Kasman and his team write.

While it remains to be seen whether the tariffs could be implemented and potentially negotiated, the analysts say: “However, we view the full implementation of announced policies as a substantial macroeconomic shock not currently incorporated in our forecasts.

“We thus emphasise that these policies, if sustained, would likely push the US and possibly global economy into recession this year.”

It is now less than 10 minutes until the US markets open.

Futures for the S&P 500 fell 3.6 per cent before the bell, while futures for the Dow Jones Industrial Average shed 3.4 per cent, falling below the 40,000 mark. Nasdaq futures tumbled 4 per cent.

That follows Thursday’s losses for the three major US indices, which ranged between 4 per cent and 6 per cent, in what marked Wall Street’s worst day since the Covid pandemic five years ago.

Sir Keir Starmer will be holding a series of talks with global leaders this weekend as the world reels from President Trump’s tariffs and European markets plummeted.

Downing Street had made clear that the UK is “disappointed” with the US levies and will be speaking with partners in the coming days as it grapples with a “new era” in trade and a “shifting” economic landscape.

No 10 contradicted the US president’s claim on Thursday that the Prime Minister was “very happy” about the imposition of a 10% import tax on British goods entering America.

Asked on Friday whether that characterisation was accurate, a Downing Street spokesman said: “We’re disappointed by the tariffs that have been brought in.

“Clearly, there will be an economic impact from the decisions the US has taken, both here and globally, but both the Prime Minister and the Business Secretary have been very clear over the last 24 hours that we will continue to act in the best interests of the UK, and we’re prepared to do so.”

The official added: “We’ll be engaging with international leaders over the weekend… The need for engagement with international leaders is clear. It is a changing, shifting global economic landscape.”