FirstFT: Trump tariffs hit global stock markets

Good morning and welcome back. The US has imposed 25 per cent tariffs on imports from two of its biggest trading partners, Mexico and Canada. We’ll bring you all the reaction and here’s what else we’re covering today:

• Trump suspends Ukraine military aid

• Oil prices fall after Opec+ agrees to increase output

• Chinese EV maker BYD pledges to work with Tesla

• Record number of Americans apply for UK citizenship

• And have quirky meeting room names gone too far?

Fears of a full-blown trade war are mounting after Donald Trump made good on his promise to slap 25 per cent tariffs on imports from Canada and Mexico to the US. He also imposed an additional 10 per cent tariff on imports from China.

The introduction of the most serious trade measures since Trump returned to the White House drew an instant response from China. Beijing said it would impose a 10 to 15 per cent levy on US agricultural goods, including soyabeans, beef, corn and wheat, from March 10. Canada said it would immediately retaliate with a 25 per cent tariff on $30bn of US imports, and vowed similar action against a further $125bn of US goods 21 days later.

Investors reacted with horror, selling risky assets as they priced in the risk of a global economic slowdown. Stocks in Europe and Asia fell, with carmakers, which have complex cross-border supply chains, being particularly hard hit.

The falls on European and Asian stock markets follow a late sell-off on Wall Street, triggered by the White House announcement of new trade measures. The S&P 500 and Nasdaq indices had their worst session of the year. But futures contracts suggest a calmer open when trading begins in New York later this morning.

Elsewhere, Mexico’s peso and the Canadian dollar were both trading lower against the dollar but against a basket of internationally traded currencies, including the euro, yen and pound, the dollar was lower.

The US claims the tariffs were introduced because Mexico and Canada are not doing enough to stop illegal immigration and fentanyl flows across the US border. Here’s more reaction to the brewing trade war.

Here’s what else we’re keeping tabs on today:

• State of the Union: Donald Trump will address a joint session of Congress for the first time since returning to power in January.

• Results: The impact of tariffs on businesses will be in focus when retailers Target, Best Buy, Ross Stores and Nordstrom report fourth-quarter results.

• Monetary policy: Federal Reserve Bank of New York president John Williams participates in moderated discussion in New York.

• Pre-Lent: Various celebrations including Carnival, Fat Tuesday, Mardi Gras, Shrove Tuesday and Pancake Day, are held across the world.

On Thursday, join consumer editor Claer Barrett for a webinar on tackling debt to mark International Women’s Day. Register for free.

Five more top stories

1. The US is to suspend all military aid to Ukraine as Donald Trump seeks to increase pressure on Ukraine’s President Volodymyr Zelenskyy to make concessions and bring the conflict with Russia to a rapid end. The move comes after Friday’s White House confrontation between the two leaders and comments yesterday from the US president that Ukraine needs to be more “appreciative” of his country’s support.

2. Opec+ yesterday said it would proceed with a plan to increase oil production from April, in an unexpected move by the cartel that sent crude prices tumbling. The price of Brent crude, the international benchmark, dropped a further 1 per cent today to a five-month low of $70.60 a barrel. The price has now fallen more than 10 per cent from this year’s high.

• Saudi Aramco: The world’s largest oil company said this morning that technology from Chinese artificial intelligence company DeepSeek is “really making a big difference” as it reported a drop in annual profits.

• BP: The UK oil major plans to hire two new directors to help it pivot back to oil and gas after pressure from shareholders.

3. China’s leading electric-vehicle maker BYD has pledged to work with rival Tesla to combat petrol cars, while insisting that Beijing was “more open” to foreign business than the west. Speaking to the Financial Times, BYD executive vice-president Stella Li said: “Our common enemy is the internal combustion engine car.”

4. Global government borrowing is expected to reach a record $12.3tn this year, as a rise in defence and other spending by major economies and higher interest rates combine to push up debt levels. The 3 per cent rise in sovereign bond issuance across 138 countries would take the total debt stock to a record $76.9tn, according to estimates by S&P Global Ratings. The higher borrowing comes as debt-servicing costs are rising.

5. US-listed advertising group Stagwell is aiming to double the size of its business, in part through an aggressive strategy of mergers and acquisitions that seeks to capitalise on what it believes is upheaval at rival US and UK agencies. Mark Penn, the firm’s founder and chief executive, told the Financial Times he wanted to increase group revenues to as much as $5bn from $2.3bn in 2024. Read the full interview.

Today’s big read

The west’s waning appetite for international aid raises several questions, most immediately the impact on the world’s poorest and the possible implications for global health and security, including pandemic preparedness. Beyond that, it could weaken western influence in the so-called global south, particularly if China, Russia and others seek to fill the vacuum. What will aid look like in a crumbling world order?

We’re also reading . . . 

• Trump’s ‘kicking ass’: The suburban voters who propelled the president to a second term are keeping the faith as he tears up the rule book.

• Crypto: Lesser-known coins such as XRP and Solana soared on Trump’s plan to create a strategic reserve of digital assets. But what are these tokens, and who’s behind them?

• Global Insight: For many in Latin America Trump’s political instincts are reminiscent of the region’s strongmen or ‘caudillo’, writes Michael Stott.

• Mindless ‘machine-minders’: Generative AI is a tempting short-cut that can prevent university students from gaining foundational skills, writes Sarah O’Connor.

Chart of the day

The number of Americans applying for UK citizenship rose to the highest on record last year, driven by a late surge in the final months of 2024. Immigration lawyers said the record numbers of applicants were driven by UK tax changes and Trump’s return to power.

Take a break from the news . . . 

From Death Star to Raccoon Feet, have quirky meeting room names gone too far? The practice can backfire, especially when clients or colleagues are not in on the joke.