The FTSE 100 (^FTSE) and European stocks fell sharply on Wednesday as the latest set of US tariffs, including a huge 104% levy on Chinese imports, took effect.

China has vowed to take “firm and forceful” steps to protect its interests, with Beijing’s foreign ministry spokesman Lin Jian insisting that “the Chinese people’s legitimate right to development is inalienable.”

Lin said: “China’s sovereignty, security and development interests are inviolable. We will continue to take firm and forceful measures to safeguard our legitimate rights and interests.”

According to Donald Trump, other countries are keen to try to negotiate a deal, with delegations from Japan and South Korea en route to Washington.

There is growing friction within the President’s Maga coalition, after billionaire Elon Musk called Trump’s tariffs guru “dumber than a sack of bricks” over his suggestion that Tesla (TSLA) vehicles are not made in America.

• The Chinese yuan fell further against the US dollar to a fresh 19-month low on Wednesday after it slid to a record low in offshore markets overnight.
• The yuan weakened to a low of 7.3505 per dollar in the morning trading session, the lowest level since September 2023, as investors fretted about the intensifying China-US trade tensions.
• The offshore yuan pared losses and climbed about 0.62% to 7.3812 yuan per dollar in Asian trade, after sinking more than 1% in the previous session and hitting its weakest level on record at 7.4288 per dollar overnight, Reuters reported.
• AstraZeneca (AZN.L) and GSK (GSK.L) are amongst the top fallers in London today as US president Donald Trump said his administration was planning to announce a “major” tariff on pharmaceuticals “very shortly”.
• Indian pharmaceutical stocks also fell 1.7% on Wednesday. The US accounts for a third of India’s overall pharma exports.
• India’s pharma exports to the US mostly comprise generics, or cheaper versions of popular drugs. These currently attract almost no US levies, while India imposes about 10% tax on US pharma imports, according to industry experts.
• The BBC has a great breakdown on the timeline of how we got to where we are today. Here’s a snapshot from Trump’s inauguration to today:
• 20 January: Trump uses his inauguration speech to outline plans to overhaul the trade system “to protect American workers” and introduce tariffs on foreign countries “to enrich our citizens”
• 1 February: He announces a 25% levy on Canadian and Mexican imports to the US – and an additional 10% on China
• 3 February: Mexico and Canada reach a deal to pause US tariffs for one month
• 10 February: Trump announces a 25% import tax on all steel and aluminium entering the US
• 4 March: The White House places an additional tariff on Chinese imports
• 12 March: Trump’s 25% steel and aluminium tariffs take effect
• 26 March: The White House reveals new 25% duties on car and car parts coming into the US – those take effect from 2 April
• 2 April: Trump announces the US will impose “reciprocal tariffs” on certain countries, as well as a universal 10% levy on imports from all other countries
• 5 April: That 10% “baseline” tariff comes into effect
• 9 April: Custom tariffs on roughly 60 countries – dubbed the worst offenders – come into effect
• Germany is at risk of another recession thanks to US president Donald Trump’s tariff war, the finance minister for Europe’s largest economy said.
• Joerg Kukies told the Deutschlandfunk radio station on Wednesday: “A possible trade conflict increases the risk of recession, there is no question about that.”
• Germany has already suffered two consecutive years of recession, and a third would mark an historically long downturn.
• The latest set of US tariffs, including a huge 104% levy on Chinese imports, have taken effect as of today.
• China has vowed to take “firm and forceful” steps to protect its interests, with Beijing’s foreign ministry spokesman Lin Jian insisting that “the Chinese people’s legitimate right to development is inalienable.”
• Lin said: “China’s sovereignty, security and development interests are inviolable. We will continue to take firm and forceful measures to safeguard our legitimate rights and interests.”
• According to Donald Trump other countries are keen to try to negotiate a deal, with delegations from Japan and South Korea en route to Washington.
• The round of so-called “reciprocal” tariffs on imports to the US, imposed from 12.01am Eastern Time, come as Trump’s levies have shaken a global trading order that has persisted for decades, raised fears of recession and driven worldwide stocks sharply downward.
• The S&P closed below 5,000 for the first time in nearly a year on Tuesday and is nearing a bear market, defined as 20% below its most recent high.
• Stocks had across the globe on Tuesday, with indexes up 6% in Tokyo, 2.5% in Paris and 1.6% in Shanghai.
• However any optimism or buying enthusiasm soon dissipated as Trump’s tariffs became reality.
• Japan’s Nikkei 225 (^N225) slumped around 4% on the day, while other Asian shares were mostly lower on Wednesday as the latest set of US tariffs, including a massive 104% levy on Chinese imports, took effect.
• In Hong Kong, the Hang Seng (^HSI) gained 1.2% while the Shanghai Composite index (000001.SS) edged 1.3% higher amid reports that Beijing would step in to support the market.
• South Korea’s Kospi (^KS11) lost 1.7% while the S&P/ASX 200 (^AXJO) in Australia declined 1.8pc. Shares in New Zealand also fell.
• It came as Wall Street stocks tumbled across the pond again last night as initially successful efforts yesterday to rebound from big losses faded amid worries over Donald Trump’s trade war.
• All three major indexes finished firmly in the red, with the S&P 500 (^GSPC) shedding 1.6% to 4,982.77, its first close below 5,000 points in nearly a year.
• The Dow Jones Industrial Average (^DJI) ended 0.8% down at 37,645.59, while the tech-rich Nasdaq Composite (^IXIC) shed 2.2% to 15,267.91.
• Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and happening across the global economy.
• Here’s a quick look at what’s on the agenda for today:
• 7am: Trading updates: JD Sports, Saga, Oxford Biomedica, Audioboom Group
• 12pm: US MBA Mortgage Applications
• 2.30pm: US Crude Oil Inventories
• 3.30pm: US Wholesales Inventories
• 7pm: US FOMC Interest Rate Minutes