Closing post
Time to wrap up…
Global markets have been rattled by a weak US jobs report which suggests Donald Trump’s trade wars have hurt America’s labor market.
The latest Non-Farm Payroll report showed that the US economy added 73,000 jobs in July, far lower than expected, as the unemployment rate rose to 4.2% from 4.1% in June.
The Bureau of Labor also slashed the number of jobs added in recent months. May’s jobs figure was revised down by 125,000, from 144,000 to 19,000, and June was revised down by 133,000, from 147,000 to 14,000 – a combined 258,000 fewer jobs than previously reported.
Here’s the full story:
The weak jobs report rocked Wall Street, where the Dow Jones industrial average is down 496 points, or 1.1%, at 43,634 points.
US bond yields also fell sharply, as traders raised their bets on cuts to US interest rates this year.
Donald Trump repeated his demand for lower borrowing costs, claiming that Federal Reserve chair Jerome Powell was “a stubborn MORON” for not acting faster.
Stocks have fallen in London, and across Europe.
Investors were already anxious, after Trump announced new tariffs on dozens of US trading partners.
Last night, as the latest deadline to reach deals approached, the US president signed an executive order imposing tariffs ranging from 10% to 41%.
Rates were set at 25% for India, 20% for Taiwan and 30% for South Africa ahead of Trump’s self-imposed deadline of 1 August for striking trade deals with countries worldwide.
Trump also extended the deadline for a tariff agreement with Mexico by another 90 days.
Our US Politics liveblog has full reaction to the jobs report, and the trade war:
There’s been a heavy sell-off across European markets too, amid trade war fears and jitters about the US economy.
Germany’s DAX was down around 2.5% as trading ended, with the situation in Paris even worse – France’s CAC 40 has shed 2.85%.
Italy’s FTSE MIB lost 2.55%.
Updated
FTSE 100's lowest close in over a week
Tariff anxiety, and the weak US jobs report, have dragged London’s stock market down to its lowest closing level in over a week.
The FTSE 100 index of blue-chip shares has ended the day down 64 points, or -0.7%, at 9,068 points. That takes it away from record highs set yesterday, and is the lowest close since 23 July.
Banks were among those worst hit, pounded by expectations of interest rate cuts, along with some mining companies.
Updated
This post from Harvard professor Jason Furman, who chaired Barack Obama’s Council of Economic Advisers, shows how US jobs creation has been weaker this year than in 2023 and 2024:
The jobs slowdown is here with 73K jobs in July & large downward revisions to May & June bringing the average to 35K/month.
— Jason Furman (@jasonfurman) August 1, 2025
Not quite as bad as you might think because steady-state job growth is much lower in a low net immigration world but unemployment still gradually rising. pic.twitter.com/rYSFlI38MR
As well as demanding interest rate cuts (again) today, Donald Trump also called Fed chair Jerome Powell “a stubborn MORON”, and urged top Federal Reserve officials to seize control if Powell fails to cut borrowing costs.
Here’s the full story:
Stephen Miran, who chairs Donald Trump’s Council of Economic Advisors, has conceded that July’s US jobs report “isn’t ideal”.
But Miran also insists that better times are ahead.
Speaking to CNN, Miran suggests that more than half the downward revisions to employment growth in May and June (which cut employment totals by 258,000) were due to “quirks of the seasonal adjustment process”.
He also attributes some of the drop in employment to the fact the White House has “eliminated about a million jobs for foreign born workers”, according to a transcript provided by CNN.
Miran adds:
Finally, we’ve been hearing a lot about uncertainty over the last few months, but that’s all resolved now. We – we’re creating trade deals left and right that have unlocked enormous new potential for the American economy. The tariff uncertainty is fading away. Tariff rates are settling in. The one big, beautiful bill is now law. There’s no more uncertainty over the tax bill either, over the – over potentially the biggest tax hike in American history. And on top of that, there are such strong, powerful incentives in the one big, beautiful bill for investment. Things like full expensing on investment in equipment, in R&D, on new factory structures. These are huge.
So, it’s all going to get much, much better from here.
Updated
A key measure of US job creation is its weakest since early in the Covid-19 pandemic, reports Bloomberg’s Lisa Abramowicz:
The three-month average change in US payrolls has fallen to its lowest level since June 2020. pic.twitter.com/QdkHGYMWav
— Lisa Abramowicz (@lisaabramowicz1) August 1, 2025
US manufacturers blame tariffs as activity falls
More bad news: economic activity in the US manufacturing sector contracted in July for the fifth month in a row.
The latest poll of purchasing managers at US factories, just released by the Institute of Supply Management (ISM), shows that new orders and backlogs contracted in July, suggesting a weakening in demand.
Prices also rose – perhaps a sign of the impact of tariffs? – while both exports and imports contracted.
This pulled the ISM’s manufacturing PMI down to 48% in July, from 49% in June.
Susan Spence, chair of the ISM’s manufacturing business survey committee:, says:
In July, US manufacturing activity contracted at a faster rate, with declines in the Supplier Deliveries and Employment Indexes contributing as the biggest factors in the 1-percentage point loss of the Manufacturing PMI.
Some companies blamed the disruption and confusion caused by Donald Trump’s trade wars.
One, in the “apparel, leather and allied products” sector, said:
These tariff wars are beginning to wear us out. It’s been very difficult to forecast what we will pay in duties and calculate any cost savings we’ve had this year. Also, tariffs have disrupted our customs import bond.
There is zero clarity about the future, and it’s been a difficult few months trying to figure out where everything is going to land and the impact on our business. So far, tremendous and unexpected costs have been incurred.
A second, in the electrical equipment, appliances and components sector, reported:
Tariffs are causing complete uncertainty around sourcing strategies. A sit-and-wait game for now.
A third company, though, warned that higher interest rates were depressing the construction industry, while a fourth reported strong sales growth driven by datacenter construction.
Updated
A cut to US interest rates in September looks “increasingly likely”, argues James Knightley, ING’s chief international economist.
Knightley says:
It is impossible to deny that the July jobs report is weak with non-farm payrolls rising 73k versus 104k consensus, but the most striking thing is the huge 258k downward revision to the past two months of data. June job gains, which were originally 147k, are now 14k and May’s initially reported gain of 144k is now 19k.
This puts a completely different light on what has been happening in the US economy post the 2 April ‘Liberation Day’ announcements.
Updated
Some countries get reprieve in latest Trump tariffs
Lesotho isn’t the only country to receive a reprieve from Donald Trump.
As flagged earlier (see here), Lesotho was facing 50% tariffs on 2 April, an existential threat to its textile industry, but came out on Friday with a 15% rate.
That’s a relief for a state which Trump said “nobody has ever heard of” when he halted USAID earlier this year.
Also getting a drastic reduction in tariffs are Madagascar, down from 47% on 2 April to 15% on 1 August, and Botswana, down from 37% to 15%
Liechtenstein, the wealthy European state best known as a financial centre, has seen rates slashed from 37% to 15%, while the Falkland Islands have gone from 41% to 10%.
Cambodia went from 49% to 19%, while Iraq only got a four-point reduction, from 39% to 35%
Updated
Wall Street opens with a bump
Ding ding goes the opening bell on the New York Stock Exchange – the signal for an early burst of selling!
The main US stock indices have fallen sharply at the start of trading, as investors react to the flurry of tariffs announced last night and today’s weak US jobs report.
The Dow Jones industrial average (which contains 30 large US companies) has fallen by 1.1% at the start of trading, shedding 501 points to 43,629.
The broader S&P 500 index is down 1.2%, while the tech-focused Nasdaq has lost 1.5% – with Amazon falling almost 7% after issuing disappointing forecasts last night.
Today’s weak payroll report has punctured the narrative of a resilient US economy, says Kathleen Brooks, research director at XTB, explaining:
Tariffs have yet to meaningfully kick in, so the fact that jobs growth has been anemic at this early stage is worrying. As we start a new month and end the week, a new narrative about the US economy is emerging. It is one where the labour market is rapidly softening, where wage growth remains strong, which could pressurize corporate margins down the line, and where the US economy needs interest rate cuts.
For now, that narrative is bad news for global stocks.
Updated
Most of the 73,000 jobs created across the US economy in July were in healthcare.
Today’s non-farm payroll report shows that healthcare added 55,000 jobs in July, above the average monthly gain of 42,000 over the prior 12 months. That includes 34,000 in “ambulatory health care services” and 16,000 at hospitals.
Social assistance employment rose by 18,000.
But on the other side of the ledger, federal government employment levels fell by 12,000 in July and are down by 84,000 since reaching a peak in January.
That won’t give a full insight into Doge-related job cuts, though, as employees on paid leave or receiving ongoing severance pay are counted as employed.
There was little change in employment levels in other major industries, including mining, quarrying, and oil and gas extraction; construction; manufacturing; wholesale trade; retail trade; transportation and warehousing; information; financial activities; professional and business services; leisure and hospitality; and other services, the Bureau for Labor Statistics adds.
Updated
US jobs report: what the experts say
Today’s non-farm payrolls report does not paint a pretty picture, points out Nicholas Hyett, investment manager at investment service Wealth Club:
July’s job creation is slower than expected, but the bigger news is the major revision to May and June’s job numbers which are down a combined 258,000. If Fed governors were looking for reasons to cut interest rates, this is one.
The problem is that for all the extra clarity, these numbers still only show what’s happening in the rearview mirror. In hindsight, the journey so far has been bumpier and more precarious that it seemed at the time, but the road ahead is still clouded in fog. Just today, President Trump has reignited the global trade war with major knock-on effects for stock markets and the global economy. Investors and policymakers will be stuck slaloming through unexpected obstacles for some time yet.
Seema Shah, chief global strategist at Principal Asset Management, fears the US jobs market will keep weakening:
Not only was this a much weaker than forecast payrolls number, the monster downward revisions to the past two months inflicts a major blow to the picture of labor market robustness. What’s more concerning is that with the negative impact of tariffs only just starting to be felt, the coming months are likely to see even clearer evidence of a labor market slowdown.
Of course, with Powell emphasising his focus on the unemployment rate which has only ticked up to 4.2%, perhaps it is too early to press the panic button. The shrinking of labor supply is somewhat offsetting the weakness in labor demand, keeping the labor market in an uneasy state of equilibrium. Even so, the sheer weakness of today’s payrolls number means that Powell will have to take notice. The odds of a September cut just took a big leap higher.
Thomas Ryan, North America economist, agrees that today’s weak jobs report will embolden the dovish policymakers at the Federal Reserve who want to cut interest rates, saying:
The weak 73,000 rise in non-farm payrolls in July, combined with large downward revisions to May and June’s gains and an uptick in the unemployment rate to 4.2%, will strengthen the case for those on the [federal open market committee of the Federal Reserve] pushing for imminent interest rate cuts.
[Reminder, the Fed left rates on hold on Wednesday, in a split vote.]
Updated
This chart shows just how bad the last three months have been for job creation in the US:
Trump demands interest rate cut
Donald Trump has again repeated his plea for the US Federal Reserve to cut interest rates.
Shortly after today’s weak jobs report was released, Trump posted on his Truth Social site:
Too Little, Too Late. Jerome “Too Late” Powell is a disaster. DROP THE RATE! The good news is that Tariffs are bringing Billions of Dollars into the USA!
[Factcheck: tariffs are paid by the company or individual importing goods into the US. They only way they can “bring in dollars” is if the exporting company lowers its prices, to keep its goods competitive, meaning the importer doesn’t suffer a relative loss once it has paid the tariff.]
Updated
US dollar slides after weak jobs report
The US dollar is being hammered on the foreign exchange markets, as today’s weak jobs report alarms traders.
The dollar index, which tracks the greenback against a basket of currencies, is now down 0.9% today.
The euro has surged by almost a cent and a half, to $1.154, while the pound is up three-quarters of a cent at $1.328.
Here’s snap reaction from Heather Long, chief economist at credit union Navy Federal:
This is a gamechanger jobs report.
— Heather Long (@byHeatherLong) August 1, 2025
The labor market now looks a lot weaker than expected.
July job gains were a mere 73,000
June just 14,000
May just 19,000
Note: 75% of the jobs in July came from healthcare
This puts a September rate cut from the Federal Reserve back on the… pic.twitter.com/AgmMJNAvuB
Today’s surprisingly weak US jobs report is causing ructions in the market.
The yields, or interest rates, on US government bonds are falling sharply – a sign that investors are piling into bonds because they expect cuts to US interest rates to support the economy, or are simply seeking a safe-haven asset.
Reuters has the details:
US. Treasury yields fell after data showed on Friday the world’s largest economy created fewer jobs than expected in July, increasing the odds that the Federal Reserve will resume cutting interest rates at the September meeting.
U.S. two-year yields, which are tied to the Fed’s monetary policy, dropped 14.2 bps to 3.811%.
UK government bond yields – which track the cost of Britain’s government borrowing – have also dropped.
US job creation revised sharply lower
Newsflash: Employment growth across America has been much weaker than previously thought over the last three months – a sign that the US labor market may be cooling.
The latest non-farm payroll, just released, shows that US employment rose by just 73,000 in July, rather weaker than the 110,000 new jobs expected.
But the big shock comes in the latest revisions to payrolls, with previous estimates for both May and June being revised sharply lower.
The Bureau of Labor Statistics now estimates that just 19,000 new jobs were created in May, 125,000 fewer than the 144,000 previously estimated.
June’s data has been revised down too - showing that just 14,000 new jobs were created, not the 147,000 reported a month ago.
That means 258,000 fewer jobs were created in May and June than previously thought.
The US unemployment rate has risen to 4.2% from 4.1% in June.
This surprisingly weak data may be a sign that Donald Trump’s trade wars, and the associated uncertainty, have cause more damage to the US economy than previously thought. There could also be an impact from cost-cutting DOGE program pushed by Elon Musk.
The BLS says:
Employment continued to trend up in health care and in social assistance. Federal government continued to lose jobs.
Updated
Donald Trump’s tariff playbook is becoming clearer following last night’s announcement, says Paul Diggle, chief economist at Aberdeen Investments.
This playbook consists of:
A 10% global baseline tariff
A rate of at least 15% on countries with goods trade deficits with the US
An additional 40% on goods transhipped to evade higher rates elsewhere
A variety of new country-specific rates on smaller trading partners, such as 20% on Taiwan or 39% on Switzerland
Trump has also announced a 35% tariff on Canada, although the carve-out for USMCA-compliant trade remains [that’s the United States-Mexico-Canada Agreement]
Diggle adds that there are still plenty of uncertainties, including where US-China tariffs settle….
Last night’s tariff announcement contained some good news for the African country of Lesotho.
Donald Trump has lowered Lesotho’s tariff rate to 15%, having previously threatened it with a 50% rate.
That should make it easier for manufacturers in Lesotho – which last month declared a national state of disaster over the country’s “high rates of youth unemployment and job losses” – to sell their goods to American consumers.
The BBC reported earlier this week that a Lesotho garment factory, which has produced Trump-branded golf shirts, was at risk of shutting down due to the high tariffs….
A summary
A quick recap.
Stock markets in Europe and across Asia-Pacific countries have fallen after Donald Trump announced new tariffs on dozens of US trading partners.
Last night, as the latest deadline to reach deals approached, Trump signed an executive order imposing tariffs ranging from 10% to 41%.
Rates were set at 25% for India, 20% for Taiwan and 30% for South Africa ahead of Trump’s self-imposed deadline of 1 August for striking trade deals with countries worldwide.
Trump also extended the deadline for a tariff agreement with Mexico by another 90 days.
Share prices have weakened in response – with Germany’s DAX down 1.9% and France’s CAC losing 2.2%, as European stock markets fell to a one-month low.
Asia-Pacific stock markets were on track for their worst week since April, with Japan’s Nikkei 225 losing 0.6%,
South Africa’s stock market is now down almost 1.5%.
And there was shock in Switzerland, which has been lumbered with a 39% tariff rate – which manufacturers fear will lead to job losses.
Updated
European selloff deepens
The European stock market selloff is gathering pace.
After a volatile morning, Germany’s DAX index and Italy’s FTSE MIB are both down 1.9% while France’s CAC has lost 2.3%.
Joshua Mahony, chief market analyst at financial services group Rostro, reports that sentiment in the markets has ‘soured’ after last night’s tariff announcements from the White House.
Global markets are heading lower as we close out a week of major volatility, with a raft of corporate, economic, central bank, and trade headlines hitting the newswires on a daily basis. For the most part we have seen the strength of US tech earnings and positive trade agreements helping to prop up market sentiment for many markets, although that strength has started to falter as risks grow. With the DAX falling to the lowest level in a month, we have clearly started to see sentiment sour after relative stability.
The announcement of tariff levels across the globe has provided a follow up to the initial ‘Liberation Day’ cardboard cutout, with the new levels providing many with lower tariffs than had initially been set out. Notably, those rates come into play in a weeks’ time, providing hope for those seeking fresh trade agreements before the heftier tax levels come into play.
Many companies will be confused about how the new US tariffs apply to them, warns Andrew Wilson, deputy secretary-general of the International Chamber of Commerce (ICC).
Wilson explains:
“At a macro level, last night’s announcement provides confirmation that the administration is set on applying generally higher tariff rates. So, the TACO logic seems to be off the menu.
But at a more practical level, we still see companies struggling to understand how the country specific rates will apply in practice.
The Executive Order (EO) only states the headline tariff rate, with no specifics as regards their implementation aside from the EU deal.
As such, there are still widespread questions about which tariffs will stack — the Japan deal for instance is notably silent on this issue compared to the EU agreement.
So, clarity on the direction of travel. But many questions remain about implementation and the real world implications.”
As an example, the information released by the White House last night showed that Brazil now faced a tariff of 10%. However, on Wednesday Trump signed an executive order confirming that the US would impose 50% tariffs on Brazil.
And as my colleague Lisa O’Carroll explained in her earlier post, the European Union’s trade deal with the US (a 15% tariff, agreed last weekend) is not stacked on top of a pre-existing tariff, meaning it’s a better deal than many other countries.
The US dollar has hit its highest level in two months against a basket of currencies today.
The dollar index has risen by 0.1%, on track for its seventh daily rise in a row.
Traders may be calculating that Trump’s tariffs will be inflationary, pushing prices paid by consumers and making it harder for the US Federal Reserve to lower interest rates. They could also be factoring in the damage that the trade war will do to other countries, which could force their central banks to keep interest rates lower.
Job loss fears over Swiss tariffs
Donald Trump’s decision to hit Switzerland with a 39% tariff rate has caused shock in the markets, and in the Swiss Confederation.
Swiss president Karin Keller-Sutter posted on X last night that she spoke to Donald Trump on Thursday, but that the two country’s hadn’t reached an agreement.
She explained:
I had a final conversation today with US President Trump before the deadline for US tariffs expires. For the President, the trade deficit is the main focus. No agreement could be reached on the letter of intent negotiated between Switzerland and the USA.
The Swiss government says (see earlier post) it “continues to strive for a negotiated solution” over a tariff announcement which it “notes with regret”; manufacturers are warning that jobs are at risk.
Stefan Brupbacher, director of manufacturers’ association Swissmem, said:
“I am stunned. These tariffs are based on no rational basis and are arbitrary.
“This decision puts tens of thousands of jobs in the industry at risk.”
Swissmechanic, an industry lobby group, called the 39% rate “dangerous.”
It urged the government to keep negotiating in the remaining time until the tariffs are set to come into effect on 7 August, which otherwise risks leaving the economy becoming “one of the few countries that permanently struggle with structural competitive disadvantages”, Bloomberg reports.
As flagged earlier, shares in Watches of Switzerland have fallen sharply in London – they’re now down almost 9%.
Kathleen Brooks, research director at XTB, says Switzerland got the rough end of Trump’s trade war, explaining:
The Swiss rate was a shock, and the Swiss government have said that they plan to keep negotiating with the US to secure a lower levy. Chocolatiers, watch makers and pharma companies are all under threat. Pharma accounts for 50% of Swiss exports to the US. Swiss pharma giant Novartis’s share price is lower by 2% today, while Roche is lower more than 3% on Friday. Swiss pharma giants are also pressured by Trump’s campaign to force drug makers to charge lower prices for US consumers and demanding that they charge the same rate for the US as they do for other countries.
Switzerland will hope to secure the same rate as the EU, but time is running out. It appears that Switzerland may have been punished more than elsewhere because of the Swiss government’s desire to protect its openness, and to protect its domestic agriculture. Although it had said it was willing to lower import rates for fruit, nuts, shellfish and some medical devices, this was not enough for the US.
Today’s selloff has dragged European stock markets down to a one-month low.
The pan-European Stoxx 600 index is now down 1.1% at its lowest level since late June.
European pharmaceuticals stocks have dropped after Donald Trump wrote to executives at 17 companies on Thursday, demanding they match their US prices for prescription drugs with the lowest price offered in other developed nations.
Updated
Taiwan’s government is hoping that it can negotiate its new US tariff down, before the new deadline of 7 August.
Taiwanese president Lai Ching-te said today that the new 20% tariff rate set by the Trump administration on goods imported from the island is “temporary”, and the government expects to negotiate a lower figure.
Lai also noted that rates for semiconductors, electronics as well as information and communication technology will be subject to separate U.S. sectoral tariffs and are still to be worked out.
Lai told a press briefing:
“The 20% tariff rate was never Taiwan’s target to begin with. We will continue negotiations and strive for a rate that’s more favourable for Taiwan.”
French wine exporters see €1bn losses from Trump tariff
France’s wine and spirits industry expects to lose €1bn should the US go ahead with imposing a 15% import tariff on their products next week, as the European Union makes a last-ditch effort to obtain an exemption, Bloomberg reports.
The levy, due to come into force on 7 August, will likely cut a quarter of France’s annual exports from the sector, the country’s federation of wine and spirit exporters FEVS said in a statement on Friday.
It will also jeopardize the jobs of the 600,000 people directly employed by the industry, they fear.
FEVS President Gabriel Picard said:
“We welcome the efforts already made to try to obtain the exclusion of wines and spirits from this 15% duty.
“The situation cannot remain as it is. It is vital that France and the European Union actively engage with us to very concretely support our sector.”
Trump’s tariffs are a huge blow to global commerce, warns Atakan Bakiskan, US economist at Berenberg bank.
Bakiskan’s verdict is that that the situation is bad, but could have been even worse, explaining:
The tariffs distort competition between companies that produce in the US to serve the US market relative to those that produce abroad. But many European, Japanese and South Korean-based producers compete more against each other than against US-based producers in the US market.
As they all face a 15% levy, the competition between them is distorted by less than would have been the case if Trump had imposed widely different country-specific US tariffs against these key advanced economies.
The US trade war has been hampering UK and eurozone manufacturers, new data shows.
The latest poll of purchasing managers at British factories, just released, highlights that new orders at UK manufacturers fell in July.
Data provider S&P Global says:
New export orders have now decreased throughout the past three-and-a-half years, with the latest decline reflecting global tariff uncertainties, ongoing administrative issues postBrexit and rising competition.
There were reports of lower demand from North America, mainland Europe, the Middle East, India and mainland China.
A survey of eurozone factories, also released this morning, found that their supply chains remained strained in July, with delivery times lengthening.
Dr. Cyrus de la Rubia, chief economist at Hamburg Commercial Bank, explains:
“Given the fragility of the recovery, it is not demand that is causing customers to wait longer for their goods. Volatile U.S. tariff policies and uncertainty stemming from geopolitical tensions may play a key role here. We expect that companies will continue to face sudden supply chain disruptions for the foreseeable future.”
Capital Economics: New US tariff regime still not the end of the story
President Trump’s latest flurry of tariffs implies that the US effective tariff rate will rise to about 18%, from 2.3% last year, reports Stephen Brown, deputy chief North America economist at City consultancy Capital Economics.
Brown told clients this morning:
That is a little higher than we assumed and so presents modest downside risks to our forecast for global GDP growth and a small upside risk to our US inflation forecast.
That said, this is unlikely to be the final word, as it still seems likely that some other countries will reach their own deals with the US, while there is a chance that the US courts will eventually strike down these tariffs.
Updated
The headline 15% tariff rate applying to most EU goods is better than most countries as it is not in addition, or stacked on top of, a pre-existing tariff, say experts.
That was the snap analysis of Donald Trump’s tariff list by David Henig, director at the European Centre for International Political Economy.
He posted on social media:
“New US tariffs dropped. Don’t be Switzerland. Do be the EU that uniquely got a concession on tariff stacking, which should but won’t silence the doomsters with no actual trade policy or geopolitical knowledge.”
Basically the UK and the EU got the best deals from Trump. Now who predicted that? But wondering whether that shows even for this administration, experience of dealing with the US matters.
— David Henig 🇺🇦 (@DavidHenigUK) August 1, 2025
The EU says its pre-Trump average tariff was 4.8%, arguing therefore, that the 15%, is closer to others who have secured a 10% baseline tariff.
The UK’s 10% tariff is stacked on top of the average most favoured nation tariff rate of 3.7% that applied before Trump was elected, bringing the post-Trump average to 13.7% tariff.
By contrast the EU’s 15% is inclusive of the pre-Trump MFN of 4.8%.
Updated
The US stock market is set to fall when trading begins in New York in five and a half hours.
The futures market indictates that the S&P 500 – the broad index of US stocks – is on track to fall around 0.85%.
The futures contract for the tech-focused Nasdaq index is down 0.87%, while the Dow Jones Industrial Average (which tracks 30 large US companies) futures is down 0.9%.
Shares in Watches of Switzerland, the London-listed timepiece retailer, have fallen by over 5% after Donald Trump hit Swiss imports to the US with a 39% tariff.
Traders will be calculating that Watches of Switzerland will either suffer weaker US sales (American customers will pay the tariff, so its prices will be less competitive), or be forced to cut its prices in response (hitting its profits).
The Falkland Islands is the only trading partner apart from the UK that is specified in the White House list as having a 10% tariff rate on its exports to the US.
It is one of 14 British overseas territories and its top export to the US is non-fillet frozen fish.
According to the Observatory of Economic Complexity, it sold just under $26m (£19.6m) of the fish to the US in 2023, accounting for 96% of its $27.4m sales to the US in 2023.
The order states that goods imported from every nation on Earth will be subject to a 10% tariff except for goods from the 92 countries listed in an annex that are subject to higher tariff rates.
Australia, which is not listed in the annex, said it assumed that its tariff was 10%.
Updated
South Africa's rand hits two-month low after US sets 30% tariff
South Africa’s financial markets have been rattled by Trump’s decision to impose a 30% tariff on its exports to the US.
South Africa’s JSE FTSE all share index has fallen by 1.2% in morning trading, with ‘consumer cyclicals’ the worst-performing sector.
The South African rand is on the backfoot this morning too. It dipped to a two-month low of 18.24 against the US dollar, its lowest level since mid-May.
European stock markets fall
Stock markets across Europe have dropped, after Donald Trump intensified his trade war last night.
Germany’s DAX index has dropped by 1.1% at the start of trading in Frankfurt, while France’s CAC fell by almost 1% and Spain’s IBEX lost 0.6% – even though Europe reached a trade deal with the US at the start of this week.
That, and the 0.5% drop on the London stock market (see here), shows concerns that Trump’s tariffs will weigh on the global economy, weakening trade growth.
FTSE 100 opens lower
London’s stock market has opened in the red, as the City digests Donald Trump’s swathe of tariffs on trading partners.
The FTSE 100 index of blue-chip shares has dropped by over 0.5%, down 50 points at 9082 points.
That’s a fairly mild drop, taking the ‘Footsie’ away from the record high set yesterday, following the modest losses in Asia-Pacific markets earlier.
Tony Sycamore, market analyst at IG, explains:
Market reactions to the newly announced tariffs, have been relatively subdued, largely due to recent trade agreements with the EU, Japan, and South Korea + others that have mitigated their impact.
Mexico’s 90-day tariff reprieve and positive progress on US-China trade talks, as noted by President Trump, further softened the blow.
In the currency markets, the Swiss franc has dipped against the US dollar after Donald Trump imposed a 39% tariff on imports from Switzerland.
The Swiss franc is down 0.15% at 0.813 per dollar.
Trump tariffs: What the analysts say
Financial experts are digesting the new tariff rates announced by the US last night.
Jim Reid, market strategist at Deutsche Bank, points out that the effective US tariff rate is the highest since the 1930s, when the protectionist Smoot–Hawley Tariff Act was in place, exacerbating the Great Depression.
Reid explained:
Welcome to August, which begins with the deadline now having been passed for tariff deals to be concluded with the United States. Much of the rhetoric and the negotiation are now behind us and we’ll now see how the rubber hits the road. The US tariff rate has risen to about 15% from a little over 2% at the start of the year. That’s their highest level since the 1930s but that has not prevented US equities from being near their all-time highs and other markets being much stronger this year.
Michael Brown, senior research strategist at brokerage Pepperstone, points out that the Donald Trump failed to secure many trade deals during the last few months:
Quite apart from the ’90 deals in 90 days’ that the Admin had sought, what we have actually ended up with is 8 deals in 120 days, the details of most remaining fuzzy. That’s called ‘winning’, apparently.
Switzerland 'continues to strive for a negotiated solution'
Switzerland’s government has said it “notes with great regret” that the White House has announced a higher 39% tariff on Swiss imports to the United States.
In a post on X, the Swiss Federal Council has said “Switzerland has been and continues to be in contact with the responsible authorities in the US,” adding that it “continues to strive for a negotiated solution”.
The Federal Council notes with great regret that, despite the progress made in bilateral talks and Switzerland's very constructive stance from the outset, the US intends to impose unilateral additional tariffs on imports from Switzerland.
— Bundesrat • Conseil fédéral • Consiglio federale (@BR_Sprecher) August 1, 2025
The government said it would analyse the new situation and decide on how to proceed.
Asia-Pacific stock markets are on track for their worst week since April (the last time Donald Trump announced a flurry of tariffs).
MSCI’s broadest index of Asia-Pacific shares outside Japan has fallen 1.1% today, Reuters reports, bringing its total loss this week to 2.2%. That would be its biggest fall since the week ending on 11 April, after Trump’s ‘Liberation Day’ tariff announcement at the start of April.
Most markets across Asia are still showing losses today.
South Korea’s KOSPI is leading the fallers, down 4%, after Seoul’s government rolled out plans to raise taxes on investors and companies.
China’s CSI300 share index is down 0.75%, even though US Treasury Secretary Scott Bessent said yesterday that Washington and Beijing “have the makings of a deal”, although some details still need to be worked out.
Norway still aims for US trade agreement
Across Europe, politicians are digesting the latest escalation of Donald Trump’s trade war.
Norwegian Minister of Trade and Industry Cecilie Myrseth told public broadcaster NRK this morning that Norway continues to seek a trade agreement with the US, after the White House announced a 15% tariff on its exports.
Carney says Canada accounts for only 1% of US fentanyl imports
Further to Mark Carney saying Canada is “disappointed” at Trump’s 35% tariff on Canadian goods, the prime minister said the Canadian government “will act to project Canadian jobs, invest in our industrial competitiveness, buy Canadian and diversity our export markets”.
Carney said parts of Canada’s economy including lumber, steel, aluminium and automobiles were heavily impacted by American tariffs but despite the steep levy on US-bound Canadian goods outside of the US-Mexico-Canada trade agreement, Canada remained committed to the deal.
Carney said in his statement that the US had justified its 35% rate on the basis of the cross-border flow of fentanyl, “despite the fact that Canada accounts for only 1% of US fentanyl imports and has been working intensively to further reduce these volumes”.
We will continue working with the United States to stop the scourge of fentanyl and save lives in both our countries.
Carney said Canada was also working internally to “cut down trade barriers to build one Canadian economy”.
Canadians will be our own best customer, creating more well-paying careers at home, as we strengthen and diversify our trading partnerships throughout the world.
We can give ourselves more than any foreign government can ever take away by building with Canadians workers and by using Canadian resources to benefit all Canadians.
Here’s Carney’s statement via Bluesky:
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Mark Carney 'disappointed' at 35% Trump tariffs on Canada
Canadian prime minister Mark Carney has said he is disappointed at Donald Trump raising tariffs from 25% to 35% on Canadian goods outside of the US-Mexico-Canada trade agreement.
More on Carney’s statement in a moment.
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Just to recap, Donald Trump signed an executive order on Thursday that would have new tariffs on a large array of US trading partners go into effect in seven days – the next step in his trade agenda that will test the global economy and alliances.
The order was issued shortly after 7pm, the Associated Press reports, and came after a flurry of tariff-related activity in recent days, as the White House announced agreements with various nations and blocs ahead of Trump’s self-imposed deadline of 1 August.
Also on Thursday, Trump announced that he would extend trade negotiations with Mexico for 90 days.
But the vast majority of nations are continuing to face uncertainty ahead of the coming deadline. And while a handful of trade deals have also trickled in, many details remain hazy – with businesses and manufacturers around the world bracing for heightened operating costs and potential price hikes regardless.
In Canada, the mayor of an Ontario city has expressed defiance over the 35% tariffs Donald Trump has imposed on the country and called for people to “buy nothing” from the US.
Carolyn Parrish, mayor of the city of Mississauga, near Toronto, posted on X:
Canada comes of age! 35% tariffs imposed by Trump as of midnight tonight. Time to grow up! Batten down the hatches and expand to new markets. Trade east west. Remove restrictions in our own country. Refine our own oil! Buy nothing from USA. Thank you Trump for a new tomorrow!
Trump on Thursday increased tariffs from 25% to 35% on all products not covered by the US-Mexico-Canada trade agreement.
As reported earlier, the president told NBC News on Thursday he was open to further discussions with Canada, adding that he may even speak with Canadian PM Mark Carney later in the night.
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Most Asian currencies slipped to multi-month lows on Friday, with South Korea’s won and Malaysia’s ringgit leading declines, as investors fled riskier regional assets after the US’s sweeping new tariffs.
The won bore the brunt of the selloff, tumbling 0.62% to a two-month low of 1,400.6 against the US dollar, while the ringgit shed 0.5% to hit its weakest level since 23 June 23, Reuters reports.
The broad-based retreat extended across the region, with the Philippine peso, Taiwan dollar and Thai baht all declining more than 0.3% as the tariff fallout rippled through Asian markets.
The MSCI emerging market currency gauge has already fallen well over 1% so far this week, snapping in July from a six-month rally. It fell over 0.3% on Friday.
Malaysia says its revised US tariff rate has been achieved without compromising the nation’s sovereign rights after it stood firm on various “red line” issues.
Malaysia’s trade ministry said on Friday that the positive outcome of the US tariff talks followed sustained engagement between both governments and was a significant achievement of Malaysia’s thorough and methodical negotiating process, Reuters reports.
The US imposed a 19% tariff rate on Malaysia. The ministry said:
We will continue to work closely with relevant ministries, agencies to find ways to mitigate the impact of tariffs on Malaysia’s exports.
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Across the Tasman Sea, New Zealand was hit with 15% tariffs.
The country’s trade minister Todd McClay said he was hoping to have talks with his US counterparts.
“The first step will be to talk to them directly. And we’ve engaged in a lot. In fact, it’s been very good engagement,” he told Radio New Zealand.
We will be making the case about why this shouldn’t have happened, and engaging very, very quickly again with US officials to clarify this and to seek changes around the new tariffs put on New Zealand exporters.
Local news outlet Stuff.com reported that the opposition Labour party’s trade spokesperson, Damien O’Connor, said the new tariff rate was a “slap in the face” for exporters and could lead to higher costs at home.
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There was good news for Australia in the announcements from Trump – in that it was not mentioned at all.
Guardian Australia understands the US government confirmed to the Australian embassy in Washington DC that the baseline 10% tariff rate would remain in place.
“The White House has confirmed that no country has reciprocal tariffs lower than Australia,” a spokesperson for Australia’s minister for trade, Don Farrell, said on Friday morning.
Get the view from Australia here:
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Amy Hawkins, our senior China correspondent, has been reporting on the impact of Trump’s trade war on China’s fast-fashion capital Guangzhou. There, she found millions of workers toiling day and night in informal workshops to produce cheap garments for export. Business was slow, she reports:
In Panyu, Yang Ruiping has run his small clothes factory, which specialises in tops and employs about 20 people, for two decades. About 30% of his orders are exported, mostly to Shein and Amazon, down from more than 50% before the pandemic. Although the pause in the trade war has eased the pressure on his business slightly, he still has “little confidence in the US”.
“In the recent US-China trade war, if the tariffs go up, we need to lower the production costs to combat it,” he says. “It leaves little room for profit”. With no room to cut wages any lower, Yang says he is already losing money on every top he sells. He keeps accepting the orders in order to keep the factory open, but with the domestic market becoming increasingly competitive, he is aware he might not be able to operate much longer.
Read the full story here:
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More on Cambodia now – deputy prime minister Sun Chanthol has thanked Donald Trump for his understanding in Cambodia’s negotiations to reduce a tariff rate to 19% after initially being set at 49% then later 36% – among the world’s highest levies, Reuters reporting.
The news agency quoted Chanthol – Cambodia’s top trade negotiator – as saying in an interview: “If the US maintained 49% or 36%, that industry would collapse in my opinion,” referring to the garment and footwear manufacturing sector, the biggest economic driver in the country of 17.6 million people.
People would go to Indonesia, Vietnam ... a 16% difference would have been huge. We can live with 5%, anything around that. We are very grateful, for protecting our industry and its employees.
We have close to 1 million workers, mainly women, each one of those workers supporting four-five members of their family. It would have been a huge impact if this would have been bad.
Cambodia has a big trade surplus with the US, with its exports to the American market accounting for 37.9% of its total shipments in 2024, valued at close to $10bn, according to official data.
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The Indian rupee was expected to open slightly weaker on Friday amid worries over the impact of the steep US tariffs on Indian exports and persistent portfolio outflows.
Reuters reports the one-month non-deliverable forward indicated the rupee would open in the 87.65-87.70 range versus the US dollar, compared with 87.5950 in the previous session.
The rupee declined about 2% in July, with Donald Trump’s threat of a 25% levy on Indian goods – alongside an unspecified penalty – pushing it closer to its all-time low of 87.95.
Economists estimate the 25% tariff announced could shave off India’s 2025-26 growth by up to 40 basis points, but analysts and investors also believe India may be able to achieve a lower rate via negotiations.
Cambodia’s deputy prime minster has said the new 19% tariff rate protects its garment manufacturing industry with its 1 million workers and allows the country to be competitive with its peers.
Reuters quotes Sun Chanthol as saying the US’s previous tariff rate – set up to 49% – would have caused the industry to collapse.
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Asian stocks tumble amid new Trump tariffs
Shares in Asia fell on Friday after the US hit dozens of trading partners with high tariffs.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.7%, bringing the total loss this week to 1.8%. South Korea’s KOSPI plunged 3% while Taiwanese shares fell 0.9%, Reuters reports.
Japan’s Nikkei dropped 0.4%. Chinese blue chips were flat and Hong Kong’s Hang Seng index eked out a small gain of 0.2%.
“At this point, the reaction in markets has been modest, and I think part of the reason for that is the recent trade deals with the EU, Japan, and South Korea have certainly helped to cushion the impact,” said Tony Sycamore, an analyst at IG.
The market now, I think, has probably taken the view that these trade tariff levels can be renegotiated, can be walked lower over the course of time.
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The tariff list - in full
Here is a searchable list of the latest reciprocal tariffs announced by the White House:
Donald Trump has said his new steep tariffs are going “very well, very smooth” – but that he’s open to more deals.
The US president also told NBC News he was open to further discussions with Canada, adding that he may even speak with Canadian prime minister Mark Carney later in the night, Reuters reports.
Trump signed an executive on Thursday order raising tariffs on Canadian goods to 35% from 25% on all products not covered by the US-Mexico-Canada trade agreement.
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Opening summary
Welcome to our live coverage of Donald Trump’s sweeping tariff regime.
The US president signed an executive order on Thursday imposing reciprocal tariffs from 10% to 41% on US imports from dozens of countries and foreign locations. Rates were set at 25% for India, 20% for Taiwan and 30% for South Africa ahead of Trump’s self-imposed deadline of 1 August for striking trade deals with countries worldwide.
He extended the deadline for a tariff agreement with Mexico by another 90 days.
Brazil’s tariff rate was set at 10%, but a previous order signed by Trump placed a 40% tariff on some Brazilian goods, to punish the country for prosecuting its former president Jair Bolsonaro over an alleged coup attempt after the 2022 election.
In other key news:
Canadian imports will face tariffs of 35%, not the current 25%, the White House announced. Trump had threatened on Wednesday that Ottawa’s move to recognise a Palestinian state would make agreeing a trade deal “very hard”.
Some of the world’s poorest and most war-torn countries were hit with punitive rates, including Syria, which faces a levy of 41%; Laos and Myanmar with rates of 40%; Libya with a rate of 30%; Iraq with 35% and Sri Lanka with 20%. Switzerland faces a rate of 39%. The rates are set to go into effect in seven days, according to the order.
Thailand’s finance minister said on Friday that a 19% tariff rate had been agreed – significantly lower than the 36% level announced in April and better aligned with other countries in the region. Vietnam and Indonesia reportedly negotiated tariffs of 20% and 19% respectively.
China faces a separate deadline for its higher tariffs of 12 August, with an extension to the truce agreed in principle but yet to be approved by the White House.
By 31 July just eight countries or economic blocs had reached formal agreements with the White House: the UK, Vietnam, Indonesia, Philippines, South Korea, Japan, Pakistan and the EU.
– With Helen Livingstone, Lisa O’Carroll and agencies
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