Trillions wiped BACK off US markets as Trump hikes China tariffs to 145 per cent in latest move of trade war

TRILLIONS of dollars were wiped back off US stock markets yesterday after the White House confirmed tariffs on China would rocket to 145 per cent. 

Investors fled for the hills — fearing further financial turbulence would result from the near-daily ratcheting up of the levies between the two economic superpowers. 

And despite another day spent in the red, President Donald Trump still insisted his trade war was “going very well”. 

All US stock markets suffered, the S&P 500 down 4.5 per cent, the Nasdaq 5.25 per cent and the Dow Jones 3.67 per cent.

US giants Apple, Facebook’s Meta, Tesla and Microsoft all suffered heavy losses. 

Mr Trump admitted “there will be a transition cost, and transition problems” to his tariffs before insisting “in the end it’s going to be a beautiful thing”. 

A day earlier, Mr Trump bowed to the pressures of a bond market rout and paused tariffs for 90 days on the rest of the world, sparking an almighty rally on Wall Street. 

However, markets went into reverse again last night after the White House clarified the 125 per cent tariffs on China were on top of a 20 per cent already imposed for its supposed role in supplying fentanyl, a drug ravaging America. 

China had already retaliated with whopping 84 per cent tariffs before calling for dialogue “on the basis of mutual respect”. 

It added: “If you want to fight, China will fight to the end. Pressure, threats and blackmail are not the right way to deal with China.” 

At the same time, AI videos purporting to show Mr Trump, Elon Musk and Vice President JD Vance in blue overalls and goggles on a production line making Nike trainers flooded social media 

The videos were designed to mock the president’s claims that his tariffs will lead to companies bringing back factories to the US. 

Another showed a Make America Great Again hat with a “Made in China” tag and marked up in price. 

Mr Trump argued yesterday that his tariffs were necessary because of China’s “crazy” $1trillion trade surplus.

He added that some countries he had targeted with tariffs “didn’t have surpluses, but they hurt us in other ways”. 

Sir Keir Starmer defends stance

He also gave rare praise to the EU after it suspended retaliatory 25 per cent tariffs.

He said: “They saw what we did to China and they were very smart, they held back. 

“The EU is very smart but they have been taking advantage of us.” 

PM Sir Keir Starmer defended his refusal to hit back at the US levies, even though Britain is on the same flat ten per cent tariff rate as the rest of the world. 

Pressed on whether the UK’s soft stance has left us with no edge, Sir Keir said: “I don’t think having a strong relationship with the US has given us no advantage whatsoever. 

“We have got a very strong relationship on defence, security, intelligence-sharing. No two countries are as closely aligned as ours.”

When grilled that most nations now face the same tariff rate as the UK, Sir Keir added: “Of course we are continuing to talk to the US about how further we can mitigate the impact of the tariffs. But a trade war is in nobody’s interest.” 

Before pausing tariffs, Mr Trump joked at a Republican Party event that countries were “kissing my ass” to hold trade deal talks. 

Asked if he was comfortable with this language, Sir Keir said it was important to maintain a “calm and pragmatic approach” to negotiations. 

US Secretary of Commerce Howard Lutnick claimed Mr Trump’s tariffs had resulted in countries “coming with offers they would have never come with”. 

He said: “We’ll be announcing historic deals one after the other”. 

US Treasury Secretary Scott Bessent said 75 countries wanted to travel to Washington to negotiate and that Mr Trump would be directly involved in any deals. 

Mr Trump said if agreements weren’t possible “then we go back to where we were”.

To add to the wild uncertainty, he said he would not consider any exceptions “for any country or company . . . (but) it’s possible that I would”.

Ministers still hope an economic deal with America can be reached to soften the blow of the tariffs, but are also seeking to strengthen trade relations with other countries to protect the economy from further shocks. 

Chancellor Rachel Reeves will seek to negotiate with the US when she visits Washington later this month for the International Monetary Fund’s spring meeting. 

She also said a UK-EU summit on May 19 would be a chance “to refresh our relationship and make it easier for businesses to trade”. 

Last night a senior Democrat warned that tariffs risk damaging Britain’s AUKUS security pact with Australia and America. 

Tim Kaine, the Democratic Senator for Virginia, said 35 per cent of steel and aluminium used in US ships came from “trusted partners” in Europe, the UK and Canada. 

He said the US was already “having trouble getting these ships and subs on time, on budget”. 

He added: “Increase those prices and there’s going to be a problem.” 

Under the pact, Australia will acquire three nuclear-powered subs from the US and build five new nuclear-powered attack subs.